Telstra Corporation Limited v Lyons

relevant statutory provisions 12 The critical provision for the issue of statutory construction is the definition of 'suitable employment' contained in s 4(1) of the Act and reading as follows: '4(1) In this Act, unless the contrary intention appears: … "suitable employment", in relation to an employee who has suffered an injury in respect of which compensation is payable under this Act, means: (a) in the case of an employee who, on the day on which he or she was injured was a permanent employee of the Commonwealth or a licensed corporation and who did not subsequently terminate that employment - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to: (i) the employee's age, experience, training, language and other skills; (ii) the employee's suitability for rehabilitation or vocational retraining; (iii) where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or place of residence; and (iv) any other relevant matter; and (b) in any other case - any employment (including self-employment), having regard to the matters specified in subparagraphs (a) (i), (ii), (iii) and (iv);…' It is not necessary to set out the definitions of any of the terms used in definition of 'suitable employment'. 13 The liability of the Commonwealth to make payment of weekly compensation to the employee (the respondent) in respect of his injury arises upon Comcare by operation of s 19 of the Act. Pursuant to s 19(2) the amount of such compensation is worked out having regard to the amount per week that the employee is able to earn in suitable employment and the amount which the employee earns from employment (including self-employment). It is provided in s 19(4) that in determining the amount that an employee is able to earn in suitable employment, Comcare is to have regard to a number of matters including, broadly, whether the employee had opportunities to participate in suitable employment and did not do so. 14 Other provisions of the Act will be referred to in connection with specific submissions.

Tribunal's reasoning 15 The Tribunal's conclusion on the meaning and application of the definition of 'suitable employment' was expressed in the following terms: '34. In the Tribunal's opinion, there is nothing to indicate that the s4(1) of the Act's definition of "suitable employment" in paragraph (a) is ambiguous or unclear as to its meaning. To adopt a view that the expression "who did not subsequently terminate that employment", as meaning something other than its literal or objective meaning, is not open to the Tribunal. To find otherwise would require the Tribunal to conclude, in the case of a justified enforced termination of the employee, consequent upon serious breaches of the employee's terms of employment, that that should be taken to be termination instigated by the employee. In the Tribunal's opinion that interpretation is not a conclusion which the Tribunal can reach on the basis of the clear words of the statute alone and in the absence of any judicial direction to the contrary. This conclusion finds some support in Comcare v Chenhall (1996) 69 FCR 201 (Heerey J) at page 205 where his Honour said: "Mr Chenhall fell within par (a) of that definition ["suitable employment"] since on the day of the injury he was a permanent employee of the Commonwealth who did not subsequently terminate his employment - it was terminated by the Commonwealth." Similar support is found in Burns and Comcare, AAT 13448, November 1998 in the sense that a person who took voluntary redundancy was taken to have terminated his employment. Also, see Bagic and Comcare Australia, AAT 8891, November 1993.'

applicant's submissions 16 For the applicant it is said that it cannot be correct in law that the definition of 'suitable employment' is to be understood and applied irrespective of how an employee behaves him or herself. It is submitted that if the view reached by the Tribunal is correct it has the consequence that once an employee is injured he or she can renounce obligations, fail to do the job or work in a substandard fashion, thereby meaning that the applicant and the Commonwealth generally cannot terminate that employment unless it also assumes the obligation to provide such an employee with suitable employment. It is a corollary of this submission that the Tribunal should have gone on to make findings of fact concerning the conduct of the respondent. 17 The contentions for the applicant are that this position can be understood to be accommodated within the literal meaning of the words of the definition of 'suitable employment'. This, it is said, is because it is well recognised in the case law that employment can be terminated not only by notice from the employer but also by the conduct of the employee. It is said that to confine the literal meaning to the former is to give a primacy to a matter of form rather than a matter of substance. 18 To support this submission reliance is placed on a number of authorities concerning both constructive dismissal and the nature of termination of employment for the purposes of tax cases, to which reference will be made. 19 The submissions for the applicant do not point to any use of the phrase 'who did not subsequently terminate that employment' elsewhere in the Act and accept that the normal meaning of the word 'terminate' would include bringing about the end of the employment as well as that end having been brought about by notice. 20 The case for the applicant accepts that in the event of its submissions succeeding, it would not be for this Court to make the requisite findings of fact concerning the respondent. Rather, the matter should be remitted to the President of the Tribunal, assisted by submissions from the parties, to determine the best way in which the matter should be re-listed (it no longer being possible, in any event, to reconvene the former members of the Tribunal due to the unfortunate death of one of them).

respondent's submissions 21 For the respondent it is submitted that if the applicant's submissions succeed the result will be that an application for compensation under the Act will be converted into an examination of the conduct of the respondent concerned. This, it is said, will convert the application into one in the nature of a claim for unfair dismissal. It is argued that this could produce absurd or unworkable results because there are no criteria to determine relevant misconduct so that a minefield of inquiry would be opened up. 22 Rather, it is contended, the Act should be seen as of a remedial beneficial character providing injured workers with various rights, including weekly payments and medical expenses. It is not within the contemplation of the Act, it is argued, nor of the relevant sections, that attention should be directed to issues of the conduct of the employee. 23 For the respondent it is submitted that the ultimate object of the Act is not to bring about the payment of compensation but to bring about the rehabilitation of an employee so that they can return to work. The definition of 'suitable employment' considered in the context of the sections in which it is invoked should be seen as providing that if rehabilitation cannot be achieved with all the facilities available to the Commonwealth, then the employee has an entitlement to compensation but, in the case where they are no longer employed by the Commonwealth, there is a wider discretion available in respect of them. 24 It is also submitted that the phrase at the heart of this application by way of appeal, namely, the words 'who did not subsequently terminate that employment' are to be seen as straightforward, simple, ordinary words. The meaning which they have, it is submitted, is that if the worker chooses of his or her own free will to resign, to leave the employment of the Commonwealth so the Commonwealth is no longer in a position to provide rehabilitation and to provide employment then the worker does not have the benefit of subpara (a) of the definition and subpara (b) has application in that case. The words in the definition make it clear that they are referable to a termination by the employee who has voluntarily terminated the employment relationship. Where there has been misconduct and justification for a termination by the employer that is something which, it is said, lies outside the compass of the words used in par (a) of the definition of 'suitable employment'. 25 This view is supported by reference to the fact that it would have been easy for Parliament to have inserted in the section words to the effect that they were referable to an employee 'whose employment was not subsequently terminated by the Commonwealth or a licensed corporation by dismissal for misconduct'. 26 It is submitted that where the termination is by the Commonwealth no further inquiry into the circumstances of the termination is necessary for the purposes of par (a) of the definition of 'suitable employment' because once the employee has been terminated, he or she does not have access to the facilities offered by the Commonwealth consistent with its obligations to provide suitable rehabilitation and suitable employment, once a person was injured in its employ: see ss 37 and 40 of the Act. Section 37(7), in particular, provides the Commonwealth with the means to suspend the employee's rights to compensation where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program. 27 In these circumstances it is said that the analogy which the submissions for the applicant seek to draw in relation to the constructive dismissal cases and the associated tax cases is erroneous because they do not fit in with the legislative scheme of the Act. They purport to examine the entitlement of an employee to compensation in circumstances where otherwise the employee would have had no claim for compensation either under statute or a common law. In contrast here the Act provides the source of remedies so that resort to the cases is unnecessary. 28 Further it is said there is no question that the employment of the respondent was terminated by letter from the employer and it was that which brought an end to the contract of employment. 29 Therefore, the submissions for the respondent support the conclusion of the Tribunal that the relevant words in issue in the definition of 'suitable employment' are not ambiguous or unclear. It is said the submissions for the applicant would lead into collateral inquiries producing an absurd or unworkable result because of the scope of the inquiry which they would open up.

Language of the paragraph 30 The words giving rise to the issue of statutory construction in par (a) of the definition of 'suitable employment' are 'who did not subsequently terminate that employment.' The verb 'terminate' relevantly means 'to bring to an end; put an end to': The Macquarie Dictionary (Second edition, 1992) at p 1805. That verb is used in connection with the subject identified by the word 'who' which is a reference to 'an employee who…was a permanent employee of the Commonwealth…' Therefore in its terms par (a) applies to such a person who did not subsequently terminate that employment. This is the view reached also by Carr J in Comcare v Line [2002] FCA 553 upheld on appeal in Comcare v Line (2002) 71 ALD 69. As Carr J found and as the appeal court agreed, the language of par (a) is 'clear and unambiguous.' It was that description which the Tribunal relied upon in its reasoning on the meaning of par (a). In my view it follows from a plain reading of the paragraph.

The context of the Act 31 It is necessary to consider whether any different view is reached by having regard to the other provisions of the Act. The submissions for the applicant accept that there is no comparable language used elsewhere in the Act. 32 The Act is described in its title as one 'relating to the rehabilitation of employees of the Commonwealth…and to workers' compensation for those employees…' So far as this states the purpose or object underlying the Act, it is a factor to be preferred to a construction that would not promote that purpose or object: Acts Interpretation Act 1901 (Cth), s 15AA. In my opinion, the title makes apparent that there are twin purposes or objects of the Act, namely, the provision of rehabilitation and workers' compensation. 33 This is supported by reference to the provisions of the Act. I have already referred to the provisions relating to the liability to pay workers' compensation. The provisions for rehabilitation appear in Part III. It is there provided that a rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee: s 37(1) of the Act. Where an employee is undertaking a rehabilitation program under the section, compensation is not payable to the employee under s 19 or s 31 but other provisions are applicable: s 37(5). Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program, the employee's rights to compensation under the Act and to institute or continue any proceedings under the Act in relation to compensation, are suspended until the employee begins to undertake the program: s 37(7). Where an employee is undertaking or had completed a rehabilitation program, the employer shall take all reasonable steps to provide the employee with suitable employment or to assist the employee to find such employment: s 40(1). The consequence of these provisions is that the object of rehabilitation is significant and is intertwined with the provision of suitable employment to an employee of the Commonwealth. 34 That object would not be well served by an interpretation of the words at issue in the definition of 'suitable employment' if those words were also applicable, contrary to their plain and natural meaning, to an employee whose employment had been terminated by the Commonwealth. As was stated by the Full Court in Comcare v Line at 78: 'if the interpretation favoured by the appellant were to be read into the language of the Act in place of the words in issue, it would be open to the Commonwealth as the relevant employer to defeat the policy objectives of the Act by terminating the employment of the employee and thus removing the duty to provide suitable employment provided for in s40(1).' 35 At first instance in Line, Carr J relied on the principle that where two constructions of workers' compensation act are possible, that which is favourable to the worker should be preferred: applying Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335. If the worker's entitlements to rehabilitation can be defeated by the extension of the wording of par (a) to an instance of dismissal by the Commonwealth, it is clear that such interpretation, contrary to the plain reading, would not be favourable to the worker. 36 The consequence is that not only the plain language of the paragraph is against the interpretation contended for by the applicant; the wider scheme of the Act likewise does not admit of it. I regard that much as having been decided by the Full Court in Comcare v Line, although on varying circumstances from the present.

Allegedly analogous cases 37 The central principles relied by the applicant from the case law cited is that stated by Lord Denning MR in Western Excavating (E.C.C.) Ltd v Sharp [1978] QB 761 at 769. There s 5(2)(c) of Sch 1 to the Trade Union and Labour Relations Act 1974 referred to 'the employee [who] terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct.' Lord Denning said: 'If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct.' 38 Reliance is also placed on similar reasoning in a decision of the Industrial Relations Commission of New South Wales in Allison v Bega Valley Council (1995) 63 IR 68. That case concerned s 246 of the Industrial Relations Act 1991 (NSW) which operated where 'an employer dismisses…a person who is an employee of the employer' and the dismissal is found to be harsh, unreasonable or unjust. In considering whether the employer had dismissed the employee the Full Commission said: 'In some cases the circumstances in which the termination comes about makes it difficult to determine whether there was termination "by" the employer or the employee. There are cases where the courts, after analysis, have determined that although on the face of it an employee has resigned and brought about the termination of the contract of employment, in reality the conduct of the employer has compelled or unduly influenced the employee to resign. The most quoted example is an assertion by an employer to an employee to the effect that the employee must resign or he or she will be dismissed. The situation is commonly referred to in the text books and decided cases as a "constructive dismissal", that is in effect the employer has brought about the termination of the contract of employment. Although the term "constructive dismissal" is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation? It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate general principles in the absence of particular facts will not assist in the overall determination of the issue.' 39 These authorities were referred to in Peters v Jenolan Caves Reserve Trust (1998) 86 IR 162 at 167-168 and in Police Service of New South Wales v Batton (2000) 98 IR 154 at 162. Reliance was also placed for the applicant upon a decision of the English Employment Appeal Tribunal rejecting the proposition that acceptance of a fundamental breach of contract means that the accepting party has terminated the contract: Kallinos v London Electric Wire [1980] IRLR 12; cf Siagian v Sanell Pty Ltd (1994) 122 ALR 333 at 342. 40 Additionally to these constructive dismissal cases, the applicant's submissions in this respect referred to the tax cases, exemplified by AAT Case 12,997; AAT Case 12/98 (1998) 98 ATC 183. The issue there was whether an amount assessed to a taxpayer as an eligible termination payment should have been assessed as a bona fide redundancy payment within s 27F of the Income Tax Assessment Act 1936 (Cth). The Tribunal member referred to two decisions of the Tribunal in which the principle of constructive dismissal was considered. 41 It is apparent from this description of the cases referred to that, as counsel for the respondent submitted, they all arise out of the concern by the courts to protect a worker from an exploitative employer. They have nothing to do with the converse situation of an employee failing to perform his or her duties. The cases simply do not fit into the legislative scheme of the Act. That, in addition to that fact that the language of the Act gives no opening for the cases to apply. There is nothing in these cases that should occasion a departure, if it were possible, from the views reached by the Full Court in Comcare v Line on the meaning of the words at issue in par (a) of the definition of suitable employment.

conclusion 42 The result is that the Tribunal was correct to conclude that the respondent was not precluded from the application of par (a). Therefore the first ground of the application fails and the remaining grounds of the application fail in consequence. 43 It also follows that the respondent is entitled to succeed on the cross-appeal. The correct interpretation of 'suitable employment' for the purposes of s 19 of the Act did not require the Tribunal to determine and make any findings of fact as to whether the applicant was justified in terminating the respondent's employment on 5 December 1998. Additionally the Tribunal should itself have determined the rate and amount of weekly incapacity payments. 44 It is common ground that the matter should therefore be referred back to the President of the Tribunal for allocation to a Tribunal for determination of the amount of compensation payable to the respondent in accordance with the law. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.