Choppair Helicopters Pty Ltd v Bobridge

BROMBERG J: 1 In my earlier reasons published on 15 March 2018 (Choppair Helicopters Pty Ltd v Bobridge [2018] FCA 325), I sought further submissions from the parties in relation to Ms Bobridge's claim for accident make-up pay made pursuant to cl 22 of the AP Award ("accident pay claim") and a related claim under cl 23.5 that Choppair had failed to make superannuation payments during the period for which Ms Bobridge was entitled to accident pay ("superannuation claim"). Paragraphs [79]-[85] and [95] of my earlier reasons set out the competing contentions as well as my reasons for seeking further submissions from the parties. These reasons proceed on the basis that the reader is familiar with my earlier reasons. The abbreviations used in my earlier reasons are adopted in these reasons. 2 It is convenient that I set out again what was said by the primary judge in relation to the accident pay claim. At [353] to [355] of the primary judge's reasons for judgment, his Honour said this: [353] The applicant claims $6,555.95 in accident pay. Once again there is no challenge to spreadsheet 19 which are the actual calculations. [354] Although Mr Van der Zypp says he has never accepted it, the fact is that the workplace insurer has accepted Ms Bobridge's claim for weekly payments and medical and like expenses. (This matter, of course, is not of any great significance in relation to the proper characterisation of her employment because of course there are expanded definitions as to who is an employee under the relevant workers compensation law.) Once the worker's compensation claim is established, as it is, then the award obligation is triggered. [355] It is clear that there is no defence to this claim. 3 The superannuation claim was dealt with by his Honour at [356] as follows: [356] There is no dispute that this sum has not been paid. There has been no challenge to spreadsheet 20 which is Ms Bobridge's methodology. Accordingly, this claim, in my view, is made out. 4 It is necessary that I set out (so far as is relevant) the two clauses of the AP Award in question: 22. Accident pay [Varied by PR998167, PR509199, PR523029, PR536832, PR566856, PR579551, PR592306] 22.1 In addition to any statutory entitlement to workers compensation a pilot will be paid make-up pay. 22.2 The amount of make-up pay will be the difference between the workers compensation entitlement and the amount of salary plus allowances (not including commission for aerial application operations) that the pilot would have received had the pilot been at work for the period. 22.3 The amount in clause 22.2 will not apply for the first five or aggregate of five working days of incapacity nor will it apply during any paid leave period. 22.4 Make-up pay, where no ascertainable amount is available will be based on the average for the previous 12 months for aerial application operations and three months for all other pilots or lesser period of time which any pilot has been employed. 22.5 Make-up pay will be payable for a maximum period or aggregate of period in no case exceeding a total of 52 weeks in respect of incapacity arising from any one injury. 22.6 Make-up pay will be paid through normal payroll procedures or according to alternative arrangements mutually agreed between the pilot and the employer. 22.7 Nothing in this clause will affect the right of an employer to terminate a pilot's employment in accordance with this award. No pilot will be terminated as a result of their having received make-up pay or as a means of avoiding make-up pay obligations. 22.8 In the event that a pilot receives a lump sum in redemption of regular statutory compensation entitlements, the liability of the employer to pay make-up pay will cease from the date of such redemption. 22.9 Where the pilot recovers damages from the employer or from a third party in respect of a compensable injury independent of statutory entitlements, the pilot will be liable to repay to the employer the amount of make-up pay which the pilot has received in respect of the said injury and will have no further make-up pay entitlements in respect of the injury. 22.10 Any period spent on workers compensation will accrue for the purposes of accumulation of annual leave, personal/carer's leave and long service leave entitlements. 23. Superannuation … 23.5 Absence from work Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause 23.2 and pay the amount authorised under clauses 23.3(a) or (b): (a) Paid leave - while the employee is on any paid leave; (b) Work-related injury or illness - for the period of absence from work (subject to a maximum of 52 weeks) of the employee due to work-related injury or work-related illness provided that: (i) the employee is receiving workers compensation payments or is receiving regular payments directly from the employer in accordance with the statutory requirements; and (ii) the employee remains employed by the employer.

Accident Pay 5 As I said at [84] of my earlier reasons, it may well be that in determining the accident pay claim, the primary judge proceeded on the basis that the obligation imposed on Choppair by cl 22 of the AP Award accrued upon Ms Bobridge's entitlement to be paid worker's compensation (ie at the time of her injury on 2 November 2013) because, at this time, she was unquestionably an employee to whom the AP Award applied. The submissions of the parties at the conclusion of the hearing had not addressed that approach as a basis for the primary judge's determination. For that reason, by my earlier reasons, I sought their further submissions. 6 By her further submission Ms Bobridge contended that the approach taken by the primary judge was that contemplated at [84] of my earlier reasons (as summarised above). Choppair disagreed. It said that the approach taken by the primary judge needed to be evaluated by reference to the matters at issue on the pleadings. It contended that, in that context, the primary judge can be taken to have held at [353]-[356] that: (a) since 2 November 2013, Ms Bobridge remains employed by Choppair; (b) after 2 November 2013, Choppair has been bound by the AP Award in respect of its employment of Ms Bobridge; (c) since 2 November 2013 and continuing, Choppair has had continuing obligations under: (i) clause 22.1 of the AP Award to pay accident pay; and (ii) clause 23.5 of the AP Award to pay superannuation in respect of the period from 2 November 2013. 7 On that basis, Choppair contended that the primary judge's determination that Ms Bobridge was entitled to accident pay (for 52 weeks from 2 November 2013) was contingent upon a finding made by the primary judge that Ms Bobridge was employed by Choppair over that period. Accordingly, Choppair contended that the primary judge should not be taken to have proceeded on the basis that the entitlement under cl 21.1 to accident pay accrued at the date of Ms Bobridge's injury on 2 November 2013. 8 Choppair's characterisation of how the primary judge approached the accident pay claim is largely based upon a bare denial made by it, in its Response to the Amended Statement of Claim ("Response"), to an allegation at para 135(c) of Ms Bobridge's pleading that she "remains employed by the First Respondent". 9 There are, however, a number of answers to Choppair's contention. First, para 135(c) of the Response did not deal with the claim for accident pay but was an allegation made on the superannuation claim. Second, the only matter raised by Choppair in defence of the accident pay claim was an allegation that Ms Bobridge was an independent contractor and (by inference) not an employee. An alternative contention that if Ms Bobridge was an employee at the time of her injury on 2 November 2013, she was no longer an employee after this date, was not raised by Choppair. 10 That Choppair's only defence to the accident pay claim was based on Ms Bobridge having been an independent contractor and not an employee is consistent with observations made in the primary judge's reasons (at [342]). It is also consistent with the submissions made below which are available in the material before me. For instance, Ms Bobridge's written final submissions to the primary judge on the accident pay claim were, relevantly, as follows (emphasis in original): Defence 200. The defence is that Ms Bobridge was an independent contractor and award provisions were not engaged. There is no evidence which challenges Ms Bobridge's calculations. 11 When, at [355] of his reasons, the primary judge said that "[i]t is clear that there is no defence to this claim", it seems fairly evident to me that the only "defence" that his Honour had in mind was the defence raised by Choppair concerning Ms Bobridge being an independent contractor and not an employee. The primary judge dealt with that question at [342]-[350]. It is apparent from those passages that what his Honour there considered was confined to whether Ms Bobridge was an employee or alternatively an independent contractor on the four engagements on which Ms Bobridge worked after she resigned from her permanent position on 25 October 2013. One of those occasions was 2 November 2013, being the date of the injury. All his Honour seems to have determined is that on each of those engagements Ms Bobridge was an employee. At [349] his Honour said this: It follows that Ms Bobridge must have been, at law, an employee of Choppair on the date of the accident and in the other post 25 October 2013 flights. 12 It is evident that in relation to the accident pay claim the primary judge made a finding that Ms Bobridge was employed on 2 November 2013. In so far as the primary judge's conclusion that Ms Bobridge was entitled to accident pay was based upon her being an employee, an inference is available that it was only her employment on 2 November 2013 that the primary judge thought was relevant and needed to be established. If that was how the primary judge approached the issue, it would be an approach consistent with the primary judge proceeding on the basis that Ms Bobridge's entitlement to be paid accident make-up pay accrued at the time of her injury on 2 November 2013. 13 There is, however, one other matter which needs to be taken into account. One element of the superannuation entitlement under cl 23.5 of the AP Award (see cl 23.5(b)(ii)) is that the pilot is an employee during the period for which the claim is made. Ms Bobridge's superannuation claim covered the same period as her accident pay claim. In relation to the superannuation claim, and in a submission that seems to have been directed at cl 23.5(b)(ii), Ms Bobridge contended that her "employment has never been terminated". 14 The primary judge did not expressly address that point. His Honour's reasons at [356] are very brief. After stating that the quantum of the superannuation claim had not been challenged, the primary judge only said this: "[a]ccordingly, this claim, in my view, is made out". 15 There are two possibilities. Either the primary judge erred by failing to consider whether cl 23.5(b)(ii) was satisfied or, his Honour considered that it was, but failed to record his reasons for this conclusion. On the latter possibility, the primary judge must have been satisfied that Ms Bobridge remained an employee for 52 weeks from 2 November 2013. If that is so, it is possible that that finding was relied upon on the accident pay claim as well. If it was, it may well be that the primary judge did not proceed on the basis suggested above. 16 Ultimately I am unable to say with sufficient confidence whether or not Ms Bobridge's claim succeeded because the primary judge determined that, in accordance with the primary judge's construction of cl 22, her entitlement to accident pay accrued on 2 November 2013 or, alternatively, accrued over the following 52 weeks. As I said at [85] of my earlier reasons, this issue draws attention to the question of whether the primary judge's reasons sufficiently meet the obligation to provide reasons. 17 By its further submission, Choppair contended in the alternative that the primary judge failed to give sufficient reasons for his decision on both the accident pay and the superannuation pay claim. In that respect, Choppair referred to and relied upon the principles recently set out by O'Callaghan J in DTG16 v Minister for Immigration and Border Protection [2018] FCA 143 at [9]-[12]. Choppair argued that the primary judge's holding on the accident pay claim should be quashed because of the failure to provide sufficient reasons. 18 I accept that the primary judge failed to provide sufficient reasons for upholding the accident pay claim. I consider that in that respect his Honour erred and the finding of error warrants a redetermination of that claim. Bearing in mind the need for the efficient administration of justice, the small amount of money in dispute, and that in her further submissions Ms Bobridge was provided with an opportunity to, and did make submissions on, the question of whether the primary judge's reasons were sufficient, I will proceed on the basis that the failure to provide reasons has been raised with my leave as a ground of Choppair's appeal and that Choppair has succeeded on that ground. 19 I turn then to redetermine Ms Bobridge's claim by reference to the further submissions filed by the parties on the question of whether or not Ms Bobridge's entitlement to accident make-up pay under cl 22.1 of the AP Award accrued on the date that Ms Bobridge was injured. Those submissions were correctly premised on the basis that Ms Bobridge was employed by Choppair on this date. 20 The general purpose of a provision for accident make-up pay is to compensate an employee for the difference between what the employee receives by way of workers' compensation and the income that would have been received by the employee if the employee had not been injured and had attended work. That is the evident purpose of clause 22. Clause 22.1 requires that the pilot "will be paid make-up pay". Make-up pay means the difference between the amount of the workers' compensation payment to which the employee is entitled and the amount of salary plus allowances that the pilot would have received had the pilot been at work for the period in question (cl 22.2). Alternatively, where the income that the employee would have received is not readily ascertainable (presumably because the employee's past salary was variable), cl 22.4 provides that make-up pay shall be based on an average of the employee's past salary. Clause 22 envisages that the payment of make-up pay will be periodic. Clause 22.6 requires that make-up pay "be paid through normal payroll procedures" or by an agreed alternative arrangement. 21 Clause 22.1 identifies a nexus between the statutory entitlement to workers' compensation and the entitlement to be paid make-up pay. Ms Bobridge in her submissions in support of the proposition that accident pay accrued at the time of her injury referred to s 82(1) of the Accident Compensation Act 1985 (Vic) (as in force as at 2 November 2013) ("Victorian Act") which provided as follows: 82 Entitlement to compensation (1) If there is caused to a worker an injury arising out of or in the course of any employment, the worker shall be entitled to compensation in accordance with this Act. 22 Section 93 of the Victorian Act was in the following terms: 93 Compensation in weekly payments If a worker's incapacity for work results from, or is materially contributed to by, an injury which entitles the worker to compensation, the compensation shall be in the form of weekly payments subject to and in accordance with this Part. 23 Ms Bobridge submitted that cl 22 should be construed as intending that the entitlement to accident make-up pay accrued in "lockstep" with the accrual of the entitlement to workers' compensation. There is, I think, force in that submission. 24 The terms of cl 22.1 demonstrate a correlative or mutual relationship between the workers' compensation entitlement of the employee and the accident make-up pay entitlement conferred by the clause. The latter entitlement is obviously intended to be dependent upon and supplementary to the former. That conclusion may be drawn from both the text and evident purpose of the clause. In that context, unless a contrary indication is specified, the conclusion that the supplementary entitlement to accident make-up pay was intended to accrue consistently with the primary entitlement to workers' compensation seems to be cogent. If there is no contrary indication, it would follow that what cl 22 intends is that the entitlement it confers should arise at the same time and out of the same event that gave rise to the statutory entitlement to workers' compensation. 25 In Ms Bobridge's case, as the provisions of the Victorian Act show, her entitlement to workers' compensation arose out of her injury. That injury occurred on 2 November 2013 in the course of Ms Bobridge's employment with Choppair. Her entitlement to workers' compensation and the insurer's obligation to make periodic payments were not dependent upon her continued employment with Choppair. 26 If the entitlement to accident make-up pay is intended by cl 22 to co-exist with the entitlement to workers' compensation, as both the text and the ascertainable purpose of the clause suggest to be the case, then two things follow. First, the entitlement which cl 22 confers is not intended to be dependent on the continuation of the employment. Second, subject to the 52 week limitation expressly provided for by the clause, the obligation to make periodic payments is dependent upon the employee's continued incapacity to work and not on the continuance of the employment. 27 I note that the subsistence of the employment is a topic addressed by cl 22.7. Neither party relied upon that provision but I should nevertheless consider it for completeness. It is convenient to set out its terms: Nothing in this clause will affect the right of an employer to terminate a pilot's employment in accordance with this award. No pilot will be terminated as a result of their having received make-up pay or as a means of avoiding make-up pay obligations. 28 The first sentence serves to emphasise that the entitlement conferred by the clause is independent of the continuance of the employment. The sentence supports the contention that the entitlement conferred by the clause is not dependent upon the continued existence of the employment. 29 It may be thought, however, that the second sentence tends in the opposite direction by suggesting that termination of the employment is "a means of avoiding make-up pay". It is likely that the two sentences were intended to work harmoniously rather than in opposite directions. Harmony is achieved if the phrase "a means of avoiding make-up pay" is construed as not intending to be reflective of the actual operation of the clause but as identifying a reason, subjectively held, which must not be a motivation for terminating the employment. So construed the purpose of the second sentence is to capture and thus guard against a subjective misconception of the operation of the clause which may bring about the unjustified loss of the employment. On that basis, I regard cl 22.7 as being confirmatory of the proposition that the entitlement conferred by cl 22 is not dependent or contingent upon the continuance of the employment of the incapacitated employee. 30 Each of the submissions made by Choppair for the contrary construction are unpersuasive. Choppair said that, as at the date of injury, the extent of any entitlement to accident pay would be uncertain and that the absence of certainty supported the construction that no entitlement could accrue or obligation be incurred. 31 There are a number of reasons why that contention should be rejected. There is no principle to which Choppair referred, or of which I am aware, to the effect that an entitlement may only accrue, or an obligation may only be incurred, at the time that the extent of the entitlement or obligation is known and is certain. For instance, the law of contract does not preclude an entitlement crystallising upon an event, despite the value of that entitlement or the extent of the corresponding obligation being uncertain. Insurance contracts come to mind. Contracts of that kind ordinarily give rise to an enforceable entitlement to compensation despite the fact that at the time of the loss the extent or quantum of that loss may be uncertain. That would ordinarily be so even if the extent or quantum of the loss was unable to be ascertained until after the policy of insurance had expired. 32 Choppair's submission emphasised that certainty was required because a contravention of cl 22 would give rise to a contravention of a civil penalty provision punishable by pecuniary penalties under s 546 of the FW Act. But, the submission confuses the need for certainty in relation to the discharge of an obligation with the question of when an entitlement crystallises and a corresponding obligation is incurred. 33 To discharge the obligation incurred, the employer is required to make periodic payments of accident make-up pay. For that purpose, despite Choppair's suggestion to the contrary, it is not necessary to know the full extent of the employer's liability. Nor, at the date of injury, is it necessary to know for the purpose of cl 22.3, when any period of paid leave falls within the period of incapacity. Choppair's reliance on the need for certainty is thus misplaced. It does not support the conclusion that cl 22 does not intend that the entitlement to accident pay accrue at the time of injury. 34 Choppair's second contention was to the effect that the legislative context spoke against construing cl 22 as intending that the entitlement and correlative obligation accrued or was incurred at the time of injury. I accept that the clause should be construed on the basis that it is likely that its framers intended that it be effective in the legislative scheme of the FW Act under which it would operate. Choppair's submission was this (emphasis in original): Relevantly, the Act provides that: a. a reference to a modern award "covering" an employee is a reference to the award covering the employee in relation to a particular employment (s48(5)); b. a modern award "covers" an employee … if the award is expressed to cover the employee (s48(1)); c. one of the requirements for an award to "apply" to an employee is that it "covers" the employee (s47(1)); d. a reference to a modern award "applying" to an employee is a reference to the award applying to the employee in relation to a particular employment (s47(3)); and e. a modern award does not impose obligations, or give entitlements, unless the award "applies" to the person (s46). Once the employee's particular employment ends, a modern award is no longer capable of applying to the employee, and it no longer imposes obligations or gives entitlements in respect of that particular employment. 35 The "particular employment" referred to in s 47(3) of the FW Act is simply a reference to the job held by the employee: Aldi Foods Pty Ltd v Shop, Distributive and Allied Employees Association [2017] HCA 53 at [75] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ). The basis for the emphasis given by Choppair's submission to s 47(3) is not clear. Ms Bobridge had a "particular employment", being her employment by Choppair on 2 November 2013 as a helicopter pilot. The primary judge's finding that the AP Award applied to that employment has not been disturbed on the appeal. Section 46(2) did not prevent the AP Award from conferring upon Ms Bobridge an entitlement to accident make-up pay arising out of that particular employment. The construction of cl 22 which I prefer, in which the entitlement accrues at the date of injury, is not impeded in its operation by s 46(2). 36 Nor is s 46(1) of the FW Act an impediment. On the construction I prefer, the obligation upon the employer is correlative to the entitlement conferred on the employee and arises at the same time. The payments thereafter required by the AP Award do not constitute the imposition of an obligation of a kind to which s 46(1) of the FW Act refers, but constitute the discharge of an existing obligation that was earlier imposed. Even if that is wrong, the AP Award continued to apply to Choppair even where, after 2 November 2013, it no longer applied to Ms Bobridge. I would not construe, as I perceive Choppair's submission seeks to do, s 46(1) as providing that the discharge of an obligation incurred in relation to a particular employment covered by a modern award, is contingent on the subsistence of that employment. If that were so, all manner of payments that may be required by a modern award, for instance the payment of wages paid in arrears or the making of termination payments, could be avoided by the termination of the particular employment. 37 There is nothing in ss 46-48 of the FW Act that would impede the effective operation of a scheme in which an entitlement to accident make-up pay and its correlative obligation accrues upon an injury suffered in the course of employment and which requires the discharge of that obligation by payment later in time, including where the particular employment which gave rise to the entitlement has ended. The legislative scheme does not assist Choppair's resistance to the construction of cl 22 for which Ms Bobridge contends. A contention to the same effect which also relied upon the legislative scheme was rejected by a Full Bench of the Fair Work Commission in Re 4 Yearly Review of Modern Awards - Transitional Provisions [2015] FWCFB 3523 at [221]. 38 There were further arguments relied upon by Choppair. It was said that as a matter of practical reality workers' compensation claims are not accepted by the relevant insurer on the same day as the injury occurs. The purport of that contention is not clear. It may be that Choppair intended to say that if the entitlement to accident pay accrues, it accrues on the acceptance of the workers' compensation claim rather than on the date of injury and that Ms Bobridge was not employed at the time her claim for workers' compensation was accepted. There is no evidence as to when the workers' compensation claim made by Ms Bobridge was accepted. In any event, even assuming that acceptance post-dated the injury, the contention is unpersuasive on the issue of the proper construction of cl 22 because, as stated already, it is the injury (not the acceptance of a claim) that gave rise to Ms Bobridge's entitlements to workers' compensation. 39 Choppair also relied upon the use of the future tense "will be paid" in cl 22.1 to suggest that the obligation is one that applies in the future and thus only arises post-injury. Again, that submission confuses the time at which an entitlement or the correlative obligation arises with when the obligation is to be discharged. It is clear that the clause intends periodic payments in discharge of the obligation to pay accident make-up pay at a time that post-dates the injury. That however says nothing as to when the obligation arises. Accordingly, Choppair's submission is not of assistance to the proper construction of cl 22. 40 For those reasons Ms Bobridge's claim to an entitlement under cl 22 of the AP Award is made out. The quantum payable is not at issue. It follows that an order should be made that Choppair pay $6,555.95 to Ms Bobridge in respect of her entitlement to accident make-up pay under cl 22 of the AP Award.

Superannuation claim 41 I accept Choppair's contention that the primary judge's reasons for granting the superannuation claim were inadequate. For the same reasons as those that favour a re-determination of the accident pay claim, the superannuation claim must also be re-determined. 42 In doing so I consider that continued employment is a critical condition of the obligation upon an employer to make superannuation payments under cl 23.5(b). So much is expressly provided for by cl 23.5(b)(ii). 43 Ms Bobridge referred to her own evidence before the primary judge where she said that she remained employed by Choppair as Choppair had not told her that her employment had come to an end. The import of her submission is that although she was a casual worker, a casual worker with a series of short-term engagements may have a continuing employment relationship with the person who regularly engages the worker. That was said to be a fact based inquiry and Ms Bobridge contended that Choppair ought not be permitted to raise any new argument not raised before the primary judge in circumstances where her response may call for additional evidence. The additional evidence that Ms Bobridge's contention has in mind is evidence as to whether as a casual employee on a series of short-term engagements she nevertheless had a continuing employment relationship with Choppair. 44 The difficulty with that contention is that even if Ms Bobridge was able to establish that she had a continuing employment relationship with Choppair during the course of the 52 week period following 2 November 2013, a continuing employment relationship does not meet the terms of the condition specified by cl 23.5(b)(ii). 45 In setting out the superannuation entitlement of an employee with a work-related injury or illness, cl 23.5(b) replicates the requirements of cl 22 in relation to accident pay. Superannuation is only payable during an absence from work due to a work related injury or illness, but only where the employee is receiving workers' compensation and subject to a maximum period of 52 weeks. Unlike cl 22, a further precondition is imposed that "the employee remains employed by the employer" (cl 23.5(b)(ii)). The express inclusion of that precondition in cl 23, and its absence from cl 22, supports the view I have reached that the entitlement to accident pay is not contingent upon a continuing employment. But clearly the entitlement to superannuation pay is. The express contingency is that the "employee remains employed". 46 Being in an employment relationship based on an expectation of future engagement as a casual employee, being the nature of the relationship for which Ms Bobridge contended, does not meet the terms of the requirement made by cl 23.5(b)(ii). To my mind, the phrase "remains in employment", read in its context, is referring to the continuance of ongoing or permanent employment and not merely to an ongoing relationship based on an expectation that in the future, the employee may be engaged from time to time. 47 For those reasons, Ms Bobridge's superannuation claim fails.

Conclusion and orders 48 The order of the primary judge relevant to the accident pay claim and superannuation claim was set aside as a consequence of the orders made on 17 April 2018 which gave effect to my earlier reasons. Further to the orders already made, I will make orders to the effect that the sum of $6,555.95 being Ms Bobridge's entitlement for accident make-up pay be paid to Ms Bobridge out of the funds held in the Court's Litigation Fund and that the balance held in that Fund be distributed to Choppair. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.