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Damages and Compensation: where Commonwealth and State laws collide

by | Jul 10, 2022 | Workplace & Employment

Photo from Unsplash

The claim of Vivienne Leggett against her former employer, Hawkesbury Race Club Limited has had four iterations in the Federal Court. Ms Leggett was a 26 year veteran sponsorship and marketing manager of the club forced out of her job by its newly appointed CEO.

Her claim in the Federal Court sought payment of commissions, long service leave, accrued leave and compensation for past and future economic and non-economic loss for the club’s contraventions of the Fair Work Act 2009 (FWA). In tandem with her Federal Court proceeding, Ms Leggett had also been paid benefits under the Workers Compensation Act 1987 (NSW) (WCA).

The question in Leggett v Hawkesbury Race Club Limited (No. 4) [2022] FCA 622 was the degree to which requirements contained in the WCA could preclude the Federal Court from awarding amounts for economic and non-economic loss as “compensation” under section 545 of the FWA arising from the club’s proved contraventions of the FWA.

In Leggett v Hawkesbury Race Club Limited (No. 3) [2021] FCA 1658 the Federal Court had made declarations that the club had contravened sections 90(2), 323 and 340 of the FWA and section 4 of the Long Service Leave Act 1955 (NSW). Since the mid 1980s state based workers compensation schemes have sought to limit the award of damages for employer negligence by requiring injured employees to jump statutorily imposed hurdles.

In our experience claims for substantial “compensation” for hurt, humiliation, pain and suffering arising from contraventions of the FWA where employer negligence is involved have been met by employers asserting that the state based workers compensation schemes preclude the payment of amounts representing those losses, unless as for example in Victoria, the employee has obtained a serious injury certificate.

The basis of employers’ arguments is that there is an equality between common law damages, which must be accessed under workers compensation schemes and “compensation”, which can be awarded under the FWA.  As the issue of “damages” versus “compensation” arose under section 109 of the constitution notice was required to be served on the state attorneys -general. Surprisingly none of them responded.

The Honourable Justice Rares dealt with the issue succinctly. He found that the key was in section 26(2)(v) of the FWA, which provides that a state or territorial industrial law providing for rights and remedies connected with the termination of employment (as the WCA was) is excluded from operation as it would otherwise apply to a national system employer or national system employee, which both the club and Ms Leggett were respectively.

This means that the rights conferred under the FWA were not hidebound by the requirements of the WCA. He further noted that the WCA “cannot operate to command any court … exercising federal jurisdiction in a matter that is conferred or invested in that court, as to the manner of the exercise of that federal jurisdiction.”

He found that Ms Leggett was entitled to be compensated under section 545(2) of the FWA for her past and future economic losses that she had suffered because of the club’s contraventions of the FWA, the damage to her feelings and loss of enjoyment of life without regard to the scheme established under the WCA relating to the entitlement to claim common law damages.

Having decided this Justice Rares also found that the club was entitled to obtain the benefit of some payments that had been paid to Ms Leggett under the WCA. This is an important case on the interaction of the Fair Work Act 2009 and state based workers compensation systems. It may have further dates with destiny in the Full Court of the Federal Court or even the High Court.

If you would like advice on the intersection of general protection claims under the FWA and workers compensation claims, please contact our experienced workplace relations team on (03) 9614 7111 or melbourne@nevettford.com.au