Vehicle Builders Employees Federation of Australia Ford Australia Vehicle Industry Awards 1974, 76, 78 Application for an interpretation of the above award [1980] FCA 63

Federal Court of Australia|1980-05-13|Before: Smithers J

Interpretation of Award - Conciliation and Arbitration Act 1904 8.110 ~ Award entitlements conditional on payment of workers' compensation - payments made in settlement of

claim for workers' compensation with a denial of liability -

IN THE MATTER of the Vehicle Builders Employees' Federation

IN THE MATTER of Ford Australia Vehicle Industry Awards 1974, 1976 and 1978.

IN THE MATTER of an Application for and interpretation of

Interpretation of Award - Conciliation and Arbitration Act 1904 5.110 - Award entitlements conditional on payment

of workers' compensation - payments made in settlement of claim for workers' compensation with a denial of liability -

IN THE MATTER of the Vehicle Builders Employees' Federation

IN THE MATTER of Ford Australia Vehicle Industry Awards 1974, 1976 and 1978.

IN THE MATTER of an Application for and interpretation of

IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY V. No. 2 of 1980

IN THE MATTER of the Conciliation and Arbitration Act 1904

(a) upon the true meaning and interpretation of clause 13 of

the Ford Australia Vehicle Industry Awards1974, 1976 and

fact a payment of workers' compensation in the terms

of relevant State legislation is an employee receiving payment of workers' compensation in the terms of the relevant legislation within the meaning of clause 13 of the said awardgnotwithstanding that such payment is made with a denial of liability and received as being

Application made by the Vehicle Builders Employees'Federation of Australia under s.110 of the Conciliation and Arbitration Act 1904 (the Act) is

Application is hereby made by the Vehicle Builders Employees' Federation of Australia for an ainter- pretation of the following provision of the above- mentioned Awards :-

The Applicant submits that the provision should be interpreted in the following manner: -

in the terms of the relevant State Legislation' include a payment made with a denial of lia- bility by the company to an employee of an amount equivalent to the employee's claim instituted under the relevant state legislation when the employee consents to such claim being struck

Annexed is an Affidavit by Clifford Jarrad verifying this Application and the facts in relation to which the interpretation is sought." 7

"410, Interpretation of awards. (1) The Court is empowered, subject to this section, to give an interpretation of an award,

(2) An application for the interpretation of an award may be made by the Minister or an organization or person bound by the award.

(3) The decision of the Court upon the application is final and conclusive and is binding on all organizations and persons bound by the award

IN THE MATTER of the Conciliation and Arbitration Act 1904 . '

Vehicle Industry Awards 1974, 1976 and 1978. ' A ND:

IN THE MATTER of an Application for and interpretation of the above

As the majority of claims by employees for weekly payments are satisfied by employers or their insurers without dispute, workers' compensation is paid without the institution of proceedings before the Workers' Compensation Board and without any consequential order or determination by that Board. Generally, an - employer is not permitted to cease making such

weekly payments without an order of the Board unless an employee who has been in receipt of weekly payments in respect of total incapacity has actually returned

Where an employee makes a claim in the proper way for the payment of a weekly payment or the cost of medical, hospital, nursing or ambulance services and the employer or his insurer refuses to meet the clain, ~ the procedure is that the employee institutes proceedings before the Workers'Compensation Board by lodging with

the Registrar and serving on his employer an applicataon

for determination, Where such an application is filed

and the employer desires to dispute the question of

his liability in respect of the matters raised by the application for determination, the employer is

required to file with the Workers Compensation Board

an answer stating the grounds on which and the extent

to which he denies liability. Subject to an order of

the Board, extending the time for filing an answer, an

employer's liability to pay compensation under the Act

The Ford Motor Company of Australia Ltd. (the Company) and Ensite Auto Castings Pty. Ltd. are employers to whom the Ford Australia Vehicle Industry Award 1974, 1976 and 1978 apply in respect of employees being members of the abovementioned Union. In this proceeding the Union was represented by Mr. Ryan and Miss Hickey. The Company was

Clause 13 of the said avard of 1976 is, so far as material in the following terms:~ "13 - MAKE UP OF WORKERS' COMPENSATION PAYMENTS

Subject at all times to the provisions of this clause,

an employee upon receiving payment of workers' compensation in the terms of the relevant State legislation and contin- uing to receive such payment in respect of a weekly incapacity withan the meaning of the relevant State legis- lation shall be paid accident pay by the Company which is liable to pay workers' compensation under the relevant State

legislation, which said liability by the Company for accident

pay may be discharged by another person on his behalf, provided that: ..."

From affidavits submitted by the parties it appears that: (a) it is a frequent occurrence that members of the

(b) Under the provisions of the Victorian Workers Compensation

Act 1958, a weekly payment of a specified amount is prescribed where an employee's total or partial incapacity for work results from or is materially contributed to by the injury and, in addition, the payment of the reasonable costs of medical, hospital,

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(e) On the 12th day of May 1977 the applicant caused an application for determination to be filed in the Workers! Compensation Board in relation to the claim by one Dimitria Vulin for the payment of weekly payments for total incapacity for work against his employer, Ford Motor Company of Australia Ltd. An appearance was entered on behalf of the respondent employer and it was represented on each occasion upon which the matter proceeded before the Workers' Compensation Board viz. 1th August 1977, 21st October 1977, 6th March 1978, 8th May 1978 and 16th August 1978. On the last- mentioned date the insurer of the respondent employer having agreed to pay the applicant's claim in full together with the applicant's costs, the matter was struck out, with the Board noting that the respondent denied liability.

(f) Where a respondent to such an application agrees to pay the claim an full, it 1s the general practice of the Board to strike out the application for determination with a raght of reinstatement noting that the respondent has agreed to pay the claim in

(g) In the event that the Claim Review Committee of the Company

denies liability for any claim (except in very rare

circumstances; for example, a serious factual error in an investigator's report on which

in respect of such claim is a matter for the Company's insurer. In all cases advice or correspondence relating to legal action involving payment of workers' compensation received by the company are immediately referred to the

Company's insurer and it is the responsibility of the insurer's legal advisers to deal with

proceedings before the Workers' Compensation Board.

claims for compensation made to the Workers! Compensation Board before any determination is

made by the Board on the question of whether the Company is liable to pay compensation. In some

such cases, although the Company considers that it is not liable to pay compensation and thus denies that at is so liable, payment is made of all _- medical and other expenses by the insurers together with an amount equal to the weekly payments which the claimant would have received had the Company been liable to pay workers' compensation pursuant

to the provisions of the Victorian Workers' Compensation Act. Such payments are made with a

denial of liability. The claims made by the employees

in such cases are then struck out by consent by the

Workers' Compensation Board with a raght of reinstatement. In such cases accident pay as provided for in Clause 13 of the Ford Australia

It is to be observed that the interpretation sought proceeds on the assumption that where a payment is made to an employee of the amount equivalent to a claim for workers' compensation instituted by him under the relevant State legislation and nothing more appears it is to be inferred as a matter of fact that what has been received by the employee is payment of workers' compensation in the terms of the relevant State legislation, That may well be correct. However, the interpretation sought concerns not that simple set of facts but those facts in conjunction with other facts and seeks an assertion by the Court that in cases where that totality of facts exists it is st211 true to say that it is to be inferred that the employee has received payment of

workers' compensation in the terms of the relevant State legislation.

But the drawing of inferences is essentially an exercise in fact finding. It is clear also that the facts constituting the other facts mentioned above suggest that in the situation postulated there are still other facts relevant to the question of the proper anference to be drawn. It is difficult to contemplate that the payment of the money 1n the context of the totality of the facts mentioned in the interpretation sought, proceeded without preliminary communications which may well be of importance in

relation to the decision as to the character of the payment made.

It is therefore doubly inappropriate that while purporting

to interpret the award the Court should engage in the exercise

merely of deciding a question of fact in relation to limited

It appears to me that the simple approach adopted in the application assumes that the question 1s what effect the denial of liability has in respect of a payment already characterised as a payment of workers! compensation. But this begs the question. It is not a question of taking a payment of compensation and asking/-") does clause 13 apply in respect of it if there is a denial of - liability. If there is a payment of compensation then certainly clause 15 applies. The question is whether when there is a payment by way of settlement or satisfaction of a claim made for workers compensation,one of the terms of which is that the payment is made with a denial of liability, there 1s a payment of compensation in the terms of the relevant State legislation, according to the ordinary and natural meaning of that expression. The answer to that question depends on the whole of the circumstances. The mere fact -., that one of the terms of the settlement was that it was made with a denial of liability would not be decisive. In each case the answer depends on the whole of the circumstances surrounding the payment, the form of the documents filed and delivered, the communications between the parties, written or verbal and any other relevant matter. When the relevant facts are ascertained the question is, what is the anference proper to be drawn from those facts as to the character of the payments received by the employee and that is an exercise in fact finding. If a party says, "I will pay you the workers compensation you claim and pay it to you as

such, but at the same time I deny that I am liable to pay it",

and that is all, the payment would be accorded the character of a

payment of workers'compensation. If a party says, "I deny that

I am liable to pay you any workers' compensation and I will not pay any workers! compensation, but if you suspend your proceedings against me for workers' compensation I will pay you an amount

equal to your claim", and the payment is accepted on that basis, the inference would be that the payment was not a payment of workers! compensation. No doubt, seldom would the problem he so clear

cut. It is apparent therefore that the real problem does not arise out of any difficulty in construing the expression "payment of workers' compensation in terms of the relevant state legislation", but in drawing the appropriate inference from the relevant facts

as to the character of a payment made and received in settlement of a claim. When the facts concerning any particular payment are ascertained the question whether that payment was a payment of workers' compensation may be difficult to answer because it may be difficult to determine what is the correct inference to draw from the facts. But the difficulty will not be caused by any ambiguity in the meaning of the expression "payment of workers' compensation

according to the terms of the relevant state legislation."

It appeared to me from the arguments presented in this case that there was a suggestion that assistance on the question of the effect on the accident pay liability imposed by clause 13 of a payment being made with a denial of liability might be gained by determining the sense in which the word "liable" is used in the relevant provision in clause 13. I do not think this is so and the Court is not asked to give an interpretation of clause 13 in this respect. It follows from the foregoing that once it

is clear on the facts that the employee has received a payment,

whether subject to a denial of liability or not, which is

properly to be characterised as a payment of workers' compensation in terms of the relevant state legislation, the provisions of clause 13 which are dependent upon that fact commence to operate

In the light of the foregoing it could well be appropriate

to refrain from exercising the jurisdiction conferred on the Court ~, . }

by s.110 of the Act. However in substance the question sought to be solved by the applicant in these proceedings is really the limited question whether where a payment is made with a denial of liability by way of settlement of a claim for Workers' compensation and 1s received by the employee as a payment made with that denial, the receipt by the employee of that payment, is or can be a

receipt of payment of workers' compensation in the terms of the relevant State legislation within the meaning of that expression

in clause 13. The question so posed does raise a genuine question ,

v of interpretation of clause 13, For reasons to be gathered from the foregoing the question cannot be answered yea or nay. For those same reasons it may be answered by saying that where a payment is made in discharge or settlement of a claim of an employee for workers! compensation under relevant State legislation in circumstances that, notwithstanding that it was made with a denial of liability, the payment had the character of a payment of

workers! compensation, the employee receiving such payment does receive payment of workers' compensation in the terms of the relevant

State legislation within the meaning of that expression in clause

13 of the Award. I think so to declare this interpretation of

clause 13 may serve a useful purpose. I therefore so declare.

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Judgment (94 paragraphs)