Wipro Limited v State of New South Wales

Court of Appeal (NSW)|2022-10-28|Before: Macfarlan JA, Bellew J

Solicitors: Clayton Utz (Plaintiff) Crown Solicitor's Office (Defendant) File Number(s): 2022/189157 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2022] NSWSC 907 Date of Decision: 23 June 2022 Before: Bellew J File Number(s): 2021/256791

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The proceedings were commenced in the Common Law Division and referred to the Court of Appeal by Bellew J, on the application of the plaintiff, as there is arguably conflicting appellate authority bearing on their determination. The plaintiff, Wipro Limited, is a company in the business of information technology consulting. It is registered in Australia as a foreign company and is incorporated and headquartered in India. It has an India-based workforce that is deployed globally through the use of "deputation" agreements. Thousands of its deputees work globally, including in most Australian states and territories. The second defendant, Mr Deepak Rawat, was one such employee. He was a citizen and resident of India who was offered and accepted employment in India. He worked for the plaintiff in India from 16 February 2009 to 5 February 2015 pursuant to an employment contract made in India and governed by the laws of India. He then agreed to work in New South Wales under a Deputation Agreement dated 3 February 2015 and did so from 6 February 2015 until 8 November 2019. His service totalled 10 years, 8 months and 22 days comprising: (1) The period from 16 February 2009 to 5 February 2015 in India (5 years, 11 months and 20 days) under his Indian employment contract; and (2) The period from 6 February 2015 to 8 November 2019 in New South Wales (4 years, 9 months and 2 days) under his Deputation Agreement. The issue between the parties was whether Mr Rawat's service in India is to be counted as part of his "continuous service" with the plaintiff for the purposes of s 4 of the Long Service Leave Act 1955 (NSW) ("the LSL Act"). If it was to be included, his continuous service exceeded the 10-year period which would qualify him for long service leave. If it was not, his service was of insufficient length for that purpose. The Court (Macfarlan JA; Simpson and Basten AJJA agreeing) ordering that the plaintiff is not obliged to pay Deepak Rawat a long service leave entitlement, held: 1. Where a statute makes no express provision relevantly addressing the territorial reach of its subject matter, the first task is to identify the hinge or central conception of the legislation: [19]-[21]. BHP Group Ltd v Impiombato [2022] HCA 33 at [59]; (2022) ALJR 956; DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242, applied. 1. Once the relevant "central conception" of an Act has been identified, an inquiry as to its connection with New South Wales is to be undertaken: [41]. 2. The central conception or hinge of the LSL Act is the concept of "continuous service"; its intended territorial reach is determined by considering whether there is a substantial connection of the continuous service to New South Wales: [38], [40]. 3. The performance of service within New South Wales is an obvious connecting factor but, depending upon the circumstances of particular cases, there may be other factors connecting the service to New South Wales, such as the relevant contract having been made in New South Wales or directions having been given in New South Wales for an employee to work outside the jurisdiction: [41]. 4. In the present case Mr Rawat's initial period of employment in India was a discrete period which did not have the requisite connection with New South Wales: [42]. 5. The existence or otherwise of a substantial connection should be assessed by reference to the service when it occurs rather than retrospectively on cessation of the service. This approach is conducive to the desirable ends of enabling workers to have knowledge of their entitlements and employers to have knowledge of their liabilities over time: [43]. 6. The alternative approaches set out in Australian Timken Pty Ltd v Stone (No 2) [1971] AR 246 ("Australian Timken") and International Computers (Aust) Pty Ltd v Weaving [1981] 2 NSWLR 64 are unacceptable because they involve a retrospective assessment at the time of cessation of employment of whether the worker's period of "continuous service" as a whole had a substantial connection with New South Wales, and the outcome of that assessment may be very different to that which would have been made from time to time in the course of the employment: [43]. 7. The decision in Infosys Technologies Ltd v State of Victoria (2021) 64 VR 61; [2021] VSCA 219 should be followed: [55]-[58]. The decision in Cummins South Pacific Pty Ltd v Keenan (2020) 281 FCR 421; [2020] FCAFC 204 is plainly wrong to the extent that it adopted and applied the test stated in Australian Timken: [49].

Judgment

MACFARLAN JA: These proceedings were commenced by summons filed in the Common Law Division and entered into the Administrative and Industrial Law List. On the application of the plaintiff, Bellew J referred the proceedings to this Court for determination as there is arguably conflicting appellate authority bearing on their determination ([2022] NSWSC 907). At the request of the parties, his Honour also posed certain questions for this Court to consider but it is unnecessary for it to do so because, the proceedings having been referred to it, the Court can and should make appropriate orders disposing of the proceedings, leaving its reasons for judgment to explain, in the usual fashion, why the orders have been made.
By its further amended summons, the plaintiff, Wipro Limited, sought a number of declaratory and other orders. The interest of the first defendant, the State of New South Wales, arises from its role as prosecutor under the Long Service Leave Act 1955 (NSW) ("the LSL Act"). It is only necessary to refer to Order 1 of the orders sought because that is the only order (other than an order for costs against the first defendant) that the plaintiff seeks in the event that its contentions are successful: "Pursuant to section 75 of the Supreme Court Act 1970 (NSW)… (or the inherent or equitable jurisdiction of this Court), a declaration that the Plaintiff… is not obliged to pay Deepak Rawat [the second defendant] a long service leave entitlement pursuant to section 4(5) of the Long Service Leave Act 1955 (NSW)…". The second defendant did not play an active part in the proceedings.
For the reasons given below, I consider that the plaintiff's contentions should be accepted and that the declaration it seeks should be made.

THE ISSUE BETWEEN THE PARTIES

The issue between the parties is whether Mr Rawat's service in India in the employment of the plaintiff is to be counted as part of his "continuous service" with it for the purposes of s 4 of the LSL Act. If it is to be included, Mr Rawat's continuous service with the plaintiff exceeded the 10-year period which would qualify him for long service leave under s 4(2)(a) of the Act (or the 5 year period under s 4(2)(a)(iii)). If it is not, his service was of insufficient length for that purpose. As I have indicated, I consider the latter to be the case.

THE CIRCUMSTANCES OF MR RAWAT'S EMPLOYMENT BY THE PLAINTIFF

The following description of the uncontentious factual circumstances reflects that given in the plaintiff's written submissions.
The plaintiff is a company incorporated and headquartered in India. It is registered in Australia as a foreign company and its operations in Australia and India are conducted by the same entity.
It is in the business of information technology consulting and has a presence in over 55 countries. It delivers its services to clients by using staff based in those countries and a deployable workforce based in India. The latter possesses niche expertise which the plaintiff can utilise in its global operations.
When the need arises for the plaintiff to utilise this expertise, it seeks out expressions of interest from members of its India-based workforce. After a suitable employee is identified and selected, that employee is offered a "Deputation Agreement". The plaintiff has thousands of deputees working globally, including in most Australian states and territories. Members of its Indian workforce commonly go back and forth to India and work in multiple overseas jurisdictions. At any one time, the plaintiff could have over 750 deputees working in NSW.
Mr Rawat was one such employee. He was a citizen and resident of India who was offered and accepted employment in India. He worked for the plaintiff in India from 16 February 2009 to 5 February 2015 pursuant to the terms of a contract of employment made in India and governed by the laws of India. He then agreed to work in New South Wales under a Deputation Agreement dated 3 February 2015 and did so from 6 February 2015 until 8 November 2019 when he resigned from his employment.
Mr Rawat's service totalled 10 years, 8 months and 22 days [elsewhere referred to as 23], comprising: 1. A continuous period from 16 February 2009 to 5 February 2015 in India (5 years, 11 months and 20 days) under his Indian employment contract; and 2. A continuous period between 6 February 2015 and 8 November 2019 in New South Wales (4 years, 9 months and 2 days) under his Deputation Agreement.
Mr Rawat's Deputation Agreement stated, in part: "Long Service Leave ('LSL') legal provisions [will] not be applicable to you as the term of your deputation is temporary and you are expected to return to India". It also stated that "[y]ou will be required to return to India immediately upon the completion or termination of your temporary assignment" and that "[o]ther terms and conditions of your [initial] appointment remain unchanged".
Mr Rawat's employment continued to be subject to Indian legislation while he was in New South Wales. Relevantly, the Payment of Gratuity Act 1972 (India) ("the Gratuity Act") required the plaintiff to make a payment to its Indian employees when their employment ended, if they had completed five or more years of continuous service. The payment was to be calculated at the rate of 15 days of wages for every completed year of service. When Mr Rawat's employment ended in NSW, the plaintiff paid him his Gratuity Act entitlement of INR ₹265,523. This entitlement was calculated to reflect the entire length of his employment, including his deputation in New South Wales.

LONG SERVICE LEAVE ACT 1955 (NSW)

Relevant provisions of the LSL Act in force at the times material to these proceedings and, apart from s 8, also at the present time, are as follows: "4 Long service leave (1) Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section. (2) (a) Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall: (i) in the case of a worker who has completed at least 10 years service with an employer be: (A) in respect of 10 years service so completed, 2 months, and (B) in respect of each 5 years service with the employer completed since the worker last became entitled to long service leave, 1 month, and (C) on the termination of the worker's services after the completion of 15 years service, in respect of the number of years service with the employer completed since the worker last became entitled to an amount of long service leave, a proportionate amount on the basis of 2 months for 10 years service, and (ii) in the case of a worker who has completed at least 10 years service but less than 15 years with an employer and whose services with the employer are terminated or cease for any reason, be a proportionate amount on the basis of 3 months for 15 years service, and (iii) in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker's serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service. … (3) Subject to subsection (5), where a worker has become entitled to long service leave in respect of the service of the worker with an employer, the employer shall give to the worker and the worker shall take the leave: (a) as soon as is practicable having regard to the needs of the employer's establishment, or, where the employer and the worker agree that the taking of the leave be postponed until an agreed date, as from that date, (b) in one continuous period or, if the worker and the employer so agree, in the following separate periods and not otherwise: (i) where the amount of the leave is 2 months, in two separate periods, (ii) where the amount of the leave exceeds 2 months and does not exceed nineteen and one-half weeks, in two or three separate periods, (iii) where the amount of the leave exceeds nineteen and one-half weeks, in two, three or four separate periods: … (11) For the purposes of this section: (a) service of a worker with an employer means continuous service, whether on a permanent, casual, part-time or any other basis, under one or more contracts of employment, (a1) the service of a worker with an employer shall be deemed to be continuous notwithstanding that the service has been broken by reason only of an interruption or determination thereof: (i) caused by the absence of the worker under the terms of the worker's employment, (ii) caused by the absence of the worker on account of illness or injury, (iii) made by the employer with the intention of avoiding any obligation imposed on the employer by this Act or by any obligation in relation to sick leave imposed on the employer by a State industrial instrument, (iv) arising directly or indirectly from an industrial dispute, (v) made by the employer by reason of slackness of trade, (vi) arising from the absence of the worker for any cause by leave of the employer, or (vii) caused by the employer for any reason other than those referred to in subparagraphs (iii)-(v) where the worker returns to the service of, or is re-employed by, the employer within 2 months of the date on which the service was interrupted or determined, but the period during which the service is so interrupted or determined shall not in the circumstances referred to in subparagraphs (iii)-(vii), by reason only of this paragraph, be taken into account in calculating the period of service…".
Section 4(13) includes provisions preserving the continuity of an employee's service in certain circumstances where the worker is employed at different times by related companies.
Section 8 was in the following form at material times: "8 Records to be kept by employers Every employer shall keep or cause to be kept a long service leave record in a form approved by the Minister for a period of at least 6 years after the last entry therein."
The present form of s 8 is as follows: "8 Records to be kept by employer (1) An employer must ensure a long service leave record is kept in relation to each worker employed by the employer. (2) The employer must keep the long service leave records in the way prescribed by the regulations. (3) The employer must ensure the long service leave record in relation to a worker is kept for a period of at least 6 years after the day on which the worker ceases to be employed by the employer. (4) The regulations may make provision about the transfer of a long service leave record relating to a worker, or copies of the record, to the successor of an employer."
Section 9 gives an inspector power to demand the production of long service leave records required to be kept under the Act. Section 10 makes it an offence not to comply with a provision of the Act and in particular renders a person who "makes any false or misleading statement in, or any material omission from, any long service leave record which the person is required to keep" liable to a penalty. Section 10A renders directors and certain others involved in the management of an employer corporation liable in certain circumstances in relation to offences committed by the corporation.

Statutory construction in relation to extraterritorial operation

In DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242 ("DRJ") this Court held that, as a matter of construction, the Victims Rights and Support Act 2013 (NSW) did not entitle certain women to benefits under the Act in respect of alleged acts of violence committed on them in Syria and northern Iraq by an Australian man. None of the women had ever been to Australia. The Australian man was born in Sydney and lived in New South Wales until the year before the Act was passed in 2014, but that was the only connection of the events and parties to New South Wales.
Leeming JA (with the concurrence of Bell P as his Honour then was and Meagher JA) at [157] described the principle of statutory construction to be applied as follows: "… Putting to one side the different considerations applicable to legislation creating an offence, in cases where no express provision has been made connecting the statute to New South Wales, the task is to identify the central focus or central conception of the legislation, and require that to bear a connection with New South Wales. One does so as a matter of construction, based on subject matter and scope, and with a regard to internal indications and to avoiding improbable and absurd outcomes. It will be relevant to have regard to the purpose of the statute, the likelihood that the statutory purpose will be evaded if made to depend upon something readily altered at the instance of the parties, and the need to avoid an unduly restrictive approach whereby more than one factum is required to bear a connection."
To similar effect the plurality of the High Court said in BHP Group Ltd v Impiombato [2022] HCA 33 at [59]; (2022) ALJR 956: "In statutes, like the Federal Court of Australia Act [1976 (Cth)], where there is no express provision relevantly addressing the territorial reach of the subject matter of the statute, the task is to identify the hinge (also referred to as the statutory springboard, general subject matter, object of legislative concern, central conception, character or central focus) of the statute and identify its territorial connection, if any". (Footnotes omitted.)
Their Honours then at [59] approved Leeming JA's statement in DRJ at [157] of the relevant principle. Their Honours also referred to the "so-called" presumption against extraterritoriality which they described as "a rule of construction only" and which they said "may have little or no place where some other restriction is supplied by context or subject matter [of the statute in question]" (at [61]). Their Honours continued at [62]: "This Court has never taken a uniform or mechanistic approach to applying the presumption. Where the hinge or the central focus of the subject matter is identified and it does not have a clear territorial connection (that is, it appears to be at large), the presumption will generally require that the hinge be construed as territorially limited, subject to a contrary intention. Where the central focus of the subject matter of the statute, on its proper construction, has a territorial connection, it will ordinarily be unnecessary to look for further territorial restrictions. The presumption has never been understood such that it needed to be applied to all elements or words in a statute." (Footnotes omitted.)
Their Honours did not find of assistance s 21(1)(b) of the Acts Interpretation Act 1901 (Cth) which provides that references to localities, jurisdictions and other matters and things are to be construed as "in and of the Commonwealth". The equivalent NSW statutory provision expressed in corresponding terms is found in s 12 of the Interpretation Act 1987 (NSW). Like s 21(1)(b) of the Commonwealth Act, this provision is subject to the expression of a contrary intention in the Act (see s 5(2) of the NSW Act).

Long service leave case authorities

The authorities upon which the first defendant principally relies in the present proceedings are Australian Timken Pty Ltd v Stone (No 2) [1971] AR 246 ("Australian Timken") and International Computers (Aust) Pty Ltd v Weaving [1981] 2 NSWLR 64 ("International Computers"), both decisions of the Industrial Commission of New South Wales in Court Session.
Australian Timken concerned an Australian worker engaged for employment in Victoria. Immediately after his engagement he was sent to his employer's parent company's office in the United States of America where he worked for about two years. He then returned to Australia and was directed to work as an engineer in New South Wales. He served there for a further 8 years and 7 months until his voluntary resignation. The worker was employed by the Victorian company during these assignments under an unbroken contract of employment. This lasted 10 years and 7 months, of which 2 years were served in the United States and 8 years and 7 months in New South Wales.
The Commission held that for the purpose of the LSL Act the worker had been employed continuously for over 10 years, this being one of the periods that entitled him to long service leave. The Commission reasoned at 253-254 as follows: "So, just as a single happening is the crucial test in workers' compensation legislation, under the Long Service Leave Act the whole of service must be examined to see if liability exists. We are, therefore, in agreement with the appellant's approach to the problem to the extent that it contends that the service involved must be connected with New South Wales. We think, however, that its submissions go too far when they involve the proposition that the service (subject to temporary absences) which is to be rewarded must be performed entirely in New South Wales. We think that the benefits provided for in the Act accrue if at the time the relevant event occurs (that is, completion, termination or cessation) the service which was being performed up to that time has a substantial connection with this State. This interpretation seems to us to accord with the purpose and policy of the Act without being in any way inconsistent with its language. It is to be assumed that the legislature intended the statute to bear a meaning which would have regard to the practical situation in industry and would leave as few anomalies as possible. We believe that the interpretation we favour achieves this result. This view does not make it necessary, as in the case of workers' compensation legislation, that the relevant event must occur within the State but it is essential that, at the time of its occurrence, the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service. Whether it is or not must be a question of fact and degree in each case. If, however, the service is actually being performed here at the time when the relevant event occurs, this is strong although not conclusive evidence that the service has a substantial connection with New South Wales. While we reali[s]e, on this pragmatic test, that there will be some cases close to the border, we see no difficulty in the present case."
The Commission summarised its view at 254 as follows: "In summary we find that, while the place where the relevant event occurs is of important evidentiary significance, the critical test of liability is that, when that event occurs, there is service which, when looked at as a whole, is substantially connected with New South Wales."
A similar, but somewhat different, test was applied by the Commission in International Computers where the bench was differently constituted. The worker concerned had served parts of the qualification period for long service leave in Victoria, South Africa, the United Kingdom, and New South Wales. He was nevertheless found to be entitled to long service leave under the Act.
The Commission reasoned at 74 as follows: "In the light of the decision in Timken's case [1971] AR (NSW) 246 we consider that it is not necessary that all service should be substantially connected with New South Wales, but that it is essential that, at the time when the relevant event occurred, the worker's service may be fairly said to be New South Wales service. There is no doubt that at the relevant time in this case the worker's service had a substantial connection with New South Wales."
It added at 76: "In our view, it would put the position too highly if it were to be said that service did not fall within the purview of the Act unless the total service was to a substantial extent New South Wales service. In this regard we would differ, with respect, from a view which one conclusion in Timken's case [1971] AR (NSW) 246 may suggest in the reference to it being essential that, at the time of the occurrence of the relevant event, 'the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service'. Any requirement dependent on some proportion of what can be termed New South Wales service relative to the worker's total service, would introduce, by judicial interpolation, a factor for which we see no basis in the terms of the statute. There can be no question that the employment relationship and circumstances overall need to be considered in determining whether or not the service, at the relevant time, was New South Wales service. We see no room, however, for a test which is based on the length of service of itself."
In Cummins South Pacific Pty Ltd v Keenan (2020) 281 FCR 421; [2020] FCAFC 204 a worker was employed by the appellant and related entities for 34 years. He was employed by the appellant, a Victorian company, for 20 years, of which 12 were spent working in Victoria (at [139]). Neither party appears to have contended that a test other than the "substantial connection" test referred to in Australian Timken should be adopted (see [178] and [181]). In those circumstances, Bromberg J (with whom Mortimer J generally agreed) concluded at [199] as follows: "The service of Mr Keenan in question was service of some 34 years. Approximately 20 years or 60% of that service was provided to Cummins, a Victorian based employer. Of that service provided to Cummins, some 12 years was provided in Victoria including the last 1.75 years. Those features of Mr Keenan's overall service demonstrate a substantial connection between Mr Keenan's service and Victoria sufficient to characterise that service as Victorian service."
Anastassiou J also adopted the "substantial connection" test derived from Australian Timken. His Honour cited International Computers at 74 (see the passage quoted in [28] above) and added at [332]: "To the extent that International Computers is to be understood as focusing narrowly on the time at which the crystallising event occurs, at the expense of considering the question of whether there is a substantial connection to Victoria, I respectfully disagree with that approach. Such an approach would be quite unsatisfactory given that the predicate to the entitlement to long service leave is continuous service over an extended period of time."
In the present proceedings, the plaintiff relied heavily on Infosys Technologies Ltd v State of Victoria (2021) 64 VR 61; [2021] VSCA 219. In that case two workers had served more than 7 years of continuous employment with the plaintiff (7 years being the relevant qualifying period under the Victorian long service leave legislation) but each worker's employment commenced in India and ended in Victoria, with the service in Victoria being less than 3 years. The Victorian Court of Appeal held that as the workers' initial periods of employment in India had no connection with Victoria, that employment did not form part of their continuous employment for the purposes of the Victorian LSL Act.
In a joint judgment Kennedy JA and McDonald AJA applied the "central conception" test referred to by Leeming JA in DRJ to conclude at [67] and [68]: "67 The completion of seven years of continuous employment with one employer is indispensable to an employee having an entitlement to long service leave. This indispensability points to the completion of seven years of continuous employment with one employer being the central conception of the LSL Act. The deeming provisions in respect of 'one employer' (s 11), 'continuous employment' (s 12), and 'periods of continuous employment' (ss 13 and 14) are each hinged on the concept of seven years of continuous employment with one employer. 68 … An employee does not have an entitlement to long service leave by reason of termination of their employment or having made a request or being directed to take long service leave. An employee is entitled to long service leave by reason of completing seven years of continuous employment with one employer. … " (footnotes omitted.)
Their Honours stated that the events that triggered an employer's liability for an employee's long service leave entitlements (termination of employment, a request for long service leave or a direction to take long service leave) were properly characterised as "simply the occasion for an employee with an accrued long service leave entitlement, to receive that entitlement" (at [77]). They continued at [78]: "Moreover, if the occasion for receiving the entitlement is the central conception of the LSL Act, improbable and absurd outcomes could arise. Both Ms Thankappan and Ms Anbalagan had been employed continuously in India for more than seven years prior to arriving in Victoria. If their service with Infosys in India was 'continuous employment with one employer' for the purposes of s 6, they would have been entitled to make a request for long service leave immediately upon commencing work in Victoria. This would be an absurd outcome as their previous employment in India had no connection whatsoever with Victoria."
Having considered Cummins South Pacific in some detail, their Honours concluded that that decision was plainly wrong and should not be followed.
In his separate judgment, Niall JA stated his agreement with the joint judgment that "for the purposes of construction, the point of connection will generally be found in the central focus, or central conception of the relevant legislation that falls to be construed" (at [7]).
As in the joint judgment, Niall JA was critical of the decision in Cummins, his reasoning including the following at [37]: "The approach taken by Bromberg J produces anomalous results that do not sit well in the LSL Act. First, an employee might accrue long service leave on employment that has no immediate or intended connection with Victoria at the time it is performed. That is most obviously so where the employment at the time it commences has no connection with Victoria. Indeed, that was the case with the UK service performed by Mr Keenan - at the time it was performed, Mr Keenan's employment had no connection to Victoria, and possibly, he had not even contemplated a scenario in which his employment would develop a connection to Victoria in the future. The effect of the approach taken by Bromberg J is to retrospectively ascribe a connection to Victoria for past employment where, simply put, there is none. Equally, service that is plainly undertaken in Victoria might not attract long service leave if, having regard to other service, the employment as a whole lacks a sufficient connection to Victoria. In those circumstances the entitlement might not correspond to the work performed. Adopting Bromberg J's construction would also give rise to uncertainty as to when an employer is required to keep a long service record."

The parties' competing contentions

The plaintiff contends that on the proper construction of the LSL Act, its "central conception" or "hinge" is the concept of "continuous service", which qualifies workers for long service leave, or payment in lieu (see ss 4(1) and (11) of the LSL Act). On that basis, the intended territorial reach of the LSL Act is to be determined by considering if there is a substantial connection of the continuous service to New South Wales. The first part of Mr Rawat's service occurred, not in New South Wales, but in India. It had no relevant connection with New South Wales. On the plaintiff's argument, Mr Rawat's "continuous service" for the purposes of the LSL Act did not therefore include that period and without its inclusion, he served insufficient time to qualify him for long service leave under the LSL Act.
On the other hand, the first defendant, relying on Australian Timken and International Computers, contends that the "relevant event" is not the "continuous service" over a period of time, but the completion, termination or cessation of service under s 4(2)(a) of the LSL Act. It submits that the "critical test of liability is that, when that event occurs, there is service which, when looked at as a whole, is substantially connected with New South Wales" (Australian Timken at 254). On this basis, it says that Mr Rawat was entitled to long service leave because, when considered at the time of cessation of his service, his service, as a whole, had a substantial connection to New South Wales.

DEtermination of the proceedings

The plaintiff's contentions are both supported by the most recent appellate authority, being Infosys Technologies, and, in my view, compelling. The decision of this Court in DRJ points clearly to the need to identify the "central conception" or "hinge" of the LSL Act for the purpose of determining its intended operation in relation to extraterritorial circumstances such as workers' service at a place outside New South Wales. As the plaintiff submits, it is fundamental to the operation of the LSL Act that there be "continuous service" by the worker with an employer for one or other of the periods specified in the Act. This is evident from the central provision of the Act (s 4(1)), which confers an entitlement to long service leave based upon "the service of the worker with an employer", this expression being defined in s 4(11) to mean "continuous service" under a contract of employment. The "relevant dates" to which the first defendant refers, such as that of resignation, simply represent the occasions for long service leave becoming payable (as pointed out by Kennedy JA and McDonald AJA at [77] in Infosys Technologies), but do not identify the fundamental reason for entitlement.
As made clear in DRJ, once the relevant "central conception" of an Act has been identified, an inquiry as to its connection with New South Wales is to be undertaken. The performance of service within New South Wales is an obvious connecting factor but, depending upon the circumstances of particular cases, there may be other factors connecting the service to New South Wales, such as the relevant contract having been made in New South Wales or directions having been given in New South Wales for an employee to work outside the jurisdiction. As Kennedy JA and McDonald AJA, indicated in Infosys Technologies, the relevant substantial connection with the State (in that case Victoria) might be constituted by "employment performed inside Victoria, or in obedience to a direction emanating from Victoria, as well as employment formed in Victoria" (at [85]). This is not, and was not intended to be, an exhaustive description of possible connecting factors.
The inquiry as to the existence of a substantial connection of the worker's employment with New South Wales is straightforward in the present case because Mr Rawat commenced his employment with the plaintiff by serving for a discrete period of years in India before his employment came to have any connection with New South Wales. That initial period is not therefore to be counted in consideration of whether Mr Rawat has an entitlement to long service leave under the LSL Act.
It makes sense for the existence or otherwise of a "substantial connection" between the "continuous service" to be assessed by reference to the service when it occurs rather than retrospectively on cessation of the service as would be required by the decisions in Australian Timken and International Computers. Thus, where there are discrete periods of employment in different locations or distinct from each other by reason of other circumstances, their connection to New South Wales can each be assessed. Although that assessment may be difficult in some cases, that approach is conducive to the desirable ends of enabling workers to have knowledge of their entitlements, and employers to have knowledge of their liabilities, as each grows over time. Moreover, an employer's ability to keep proper records of long service leave liabilities, whether required by s 8 of the LSL Act or simply by the exigencies of its business, is greatly enhanced. Also enhanced is the ability of employers and those connected with them to avoid the commission of the statutory offences referred to in [17] above.
The alternatives, for which the first defendant contends are unacceptable because they involve a retrospective assessment at the time of completion, termination, or cessation of employment of whether the worker's period of "continuous service" as a whole had a substantial connection with New South Wales. In Australian Timken the Commission said that the place where the relevant event occurs "is of important evidentiary significance" (see [26] above) but where that occurs may be entirely arbitrary and not truly reflect a substantial, or indeed any, connection to New South Wales. Moreover, where the assessment of a substantial connection to New South Wales is to be made on completion, termination or cessation of employment, the outcome of that assessment may be very different to that which would have been made from time to time in the course of the employment.
Whilst the first defendant pointed out that anomalies could arise on both sides' approach to the construction of the LSL Act, it is pertinent to point out that the first defendant's approach could, and according to it, would, if adopted have the consequence that a period of Mr Rawat's service (being that in India) which was entirely unconnected to New South Wales when it was performed, retrospectively acquired a "substantial connection" with New South Wales, attracting the provisions of the LSL Act. Why that should be so is not at all clear.
These conclusions do not require recourse to s 12(b) of the Interpretation Act (see [22] above) but are consistent with that provision (Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581 at 612-613; [1934] HCA 3; DRJ at [104] and Infosys Technologies at [89]-[91]). Subject to the manifestation of any contrary intention, that section implies that there is to be a connection between New South Wales and the statutory provisions but does not, at least in a case such as the present, assist in identifying the nature or necessary closeness of the connection. This view is consistent with the lack of reliance by the plurality in BHP Group Ltd on the equivalent Commonwealth interpretative provision (see [22] above).
I turn now to address various submissions made by the first defendant.
First, the first defendant contends that this Court "should follow Cummins unless persuaded it is plainly wrong" which the first defendant contends it is not.
Like Kennedy JA and McDonald AJA in Infosys Technologies (see [99]-[102]) I am however persuaded that Cummins South Pacific is plainly wrong to the extent that it adopted and applied the test stated in Australian Timken, although in deference to the Court in Cummins South Pacific I note that neither party appears to have contended that the Court in that case should do otherwise (see [30] above).
Secondly, the first defendant submitted that the Australian Timken and International Computers approaches would better promote the purpose of the LSL Act which is to confer more leisure time on workers and to reward them for their service. It relied in this regard on the statement in Australian Timken that "the locality of the service appears irrelevant" and the reference in that case to there being "many companies in New South Wales with interstate and overseas ramifications". This seems to assume that, under the approach subsequently adopted in Infosys Technologies, only service within the State would be relevant. That is not so as other connecting factors may exist (see [41] above).
Moreover, the implicit suggestion that the LSL Act be given a generous construction because it confers benefits on workers does not avail the first defendant in circumstances where, as here, the Court reaches a firm conclusion as to the proper construction of the Act contrary to that propounded by the party making the suggestion. In any event, as the joint judgment in Infosys Technologies indicates, a beneficial approach to construction was reflected in their Honours' recognition that there could be other means of connection to the State than service in the State (at [85]).
Thirdly, the first defendant submitted that Infosys Technologies is to be distinguished because of a difference in the States' legislation under consideration insofar as the different Acts refer to the concepts of "employment" and "service". In my view there is not however any material distinction. For the purposes of both Acts those terms are interchangeable as illustrated by the reference in the joint judgment in Infosys Technologies to "[t]he ordinary meaning of 'employment' [being] the 'state of being employed; employ; service'" (at [84]). Likewise under the New South Wales Act for service to be relevant it must be "under one or more contracts of employment" (see s 4(11)). As with the Victorian Act, these terms should be construed "as referable to the ordinary meaning of the state of being employed, as well as the provision of service pursuant to a contract" (Infosys Technologies at [85]).
Fourthly, the first defendant submitted that there is a material distinction between the Victorian Act considered in Infosys Technologies and the New South Wales Act in that, under the former, entitlement to long service leave accrues as work is performed (with continuous accrual of 1/60 of the total period of employment, with a qualifying period of 7 years) (Infosys Technologies at [15]; LSL Act (Vic), s 6) whilst under the New South Wales Act benefits accrue at distinct intervals (after 10 years service, and then after every following five years, see s 4(2)(a)(i)) or on the happening of relevant events e.g. termination (see LSL Act (NSW) s 4(2)). This does not appear to me to be material in the sense of rendering the identification of the "central conception" of the Act in New South Wales as the "continuous service" any less appropriate than it is in relation to the Victorian Act. In both, the basis of entitlement is continuous service for an identified period. The "relevant events" to which the first defendant points are only the occasions for payment, not reflections of the fundamental reason why workers are entitled to long service leave.
Fifthly, the first defendant relies on the re-enactment presumption that "where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already 'judicially attributed to (them)'" (Re Alcan Australia Ltd; Ex Parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96, 106; [1994] HCA 34 at [20]). The foundation for application of this presumption in the present case is not a strong one but it is unnecessary to refer to the detail of the first defendant's submissions concerning it. It is sufficient to note that the presumption "cannot be relied upon to perpetuate an erroneous construction" and "will not be permitted to prevail over an interpretation otherwise appearing to be correct" (Flaherty v Girgis (1987) 162 CLR 574 at 594; [1987] HCA 17; Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329; [1996] HCA 31). The first defendant cannot therefore rely on the presumption in the present case in circumstances where the construction of the LSL Act propounded by the first defendant is clearly erroneous.

Orders

For the reasons given above, the construction of the LSL Act for which the plaintiff contended should be adopted and the decision in Infosys Technologies followed.
Accordingly, I propose the following orders: 1. Pursuant to s 75 of the Supreme Court Act 1970 (NSW), declare that the plaintiff is not obliged to pay Deepak Rawat a long service leave entitlement pursuant to s 4(5) of the Long Service Leave Act 1955 (NSW). 2. Order the first defendant to pay the plaintiff's costs of the proceedings.
SIMPSON AJA: I agree with Macfarlan JA.
BASTEN AJA: I agree with Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2022

(India) Supreme Court Act 1970(NSW)

(2020) 103 NSWLR 692

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