Khawar v Workcover Authority of New South Wales [2004] NSWIRComm 89 (31 March 2004)

Last Updated: 19 April 2004

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Khawar v WorkCover Authority of New South Wales [2004] NSWIRComm 89

FILE NUMBER(S): IRC 4986

HEARING DATE(S): 31/03/2004

EX TEMPORE DATE: 31/03/2004

PARTIES:

APPELLANT:

Saeed Khawar

RESPONDENT:

WorkCover Authority of New South Wales

JUDGMENT OF: Wright J President Walton J Vice-President Schmidt J

LEGAL REPRESENTATIVES

APPELLANT:

Solicitor: Mr L Rattenbry

Armstrong Legal

RESPONDENT:

Mr P J Gow of counsel

WorkCover Authority of New South Wales

(Mr P O'Meally)

CASES CITED: Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) (2001) 104 IR 204

WorkCover Authority of New South Wales (Inspector Fester) v Lantry (unreported, Chief Industrial Magistrate, Matter No 94/1163, 9 December 1994)

LEGISLATION CITED: Workers Compensation Act 1987 s 155 s 174

Workplace Injury Management and Workers Compensation Act 1998 Schedule 1

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

FULL BENCH

CORAM: WRIGHT J, President

WALTON J, Vice-President

SCHMIDT J

Wednesday 31 March 2004

Matter No IRC 4986 of 2003

SAEED KHAWAR v WORKCOVER AUTHORITY OF NEW SOUTH WALES

Application by Saeed Khawar for leave to appeal and appeal against the order of the Chief Industrial Magistrate given on 26 August 2003 in Matter No 20107956/03

JUDGMENT

(Extempore)

[2004] NSWIRComm 89

1 PRESIDENT: His Honour the Vice-President will give judgment on behalf of the Full Bench and pronounce the relevant orders.

2 THE VICE-PRESIDENT: This appeal arises from a decision of the Chief Industrial Magistrate given on 12 August 2003. The appellant seeks leave to appeal against the severity of the $5,000 fine imposed upon him for a breach of s 174(5) of the Workers Compensation Act 1987.

3 The appellant was the owner of three taxis. He entered into agreements with drivers that involved the driver paying a fee to use his taxis. He held a valid policy of workers compensation insurance with CGU Workers Compensation (NSW) Limited.

4 On 22 July 2002 the WorkCover Authority of New South Wales issued an order under s 174(5) of the Workers Compensation Act to the appellant requiring him to produce various wage records for the previous two years. The appellant failed to produce the required records and did not contact the WorkCover Authority as required by the order. The WorkCover Authority through an authorised officer then initiated proceedings against the appellant in the Chief Industrial Magistrate's Court.

5 In the hearing at first instance, on 12 August 2003, the defendant did not appear at the appointed time of 10 am. After waiting half an hour and calling the defendant at 10.30 am, the Chief Industrial Magistrate conducted proceedings ex parte, although it should be noted that the appellant arrived at the conclusion of the proceedings before his Worship.

6 The maximum penalty for a breach of s 174(5) is $55,000. The Chief Industrial Magistrate has the power to impose a penalty up to $22,000. His Worship found the defendant in breach of s 174(5); imposed the fine earlier referred to and awarded costs. His Worship stressed the importance of the payment of correct premiums under the Workers Compensation Act in order to protect injured workers, but also employers and the community, from the cost of industrial accidents generally. This was the rationale for a high penalty being set for a breach of the provision.

7 An application for annulment of the conviction was heard on 26 August 2003. The defendant appeared unrepresented. His Worship did not annul the conviction.

8 The appellant submitted below that he believed he was not required to provide wage records of employees to the WorkCover Authority because he viewed the drivers of his taxis as contractors and not employees. He was unaware of the extent of the definition of "employer" under Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 and that of "wage" under s 174 of the Workers Compensation Act.

9 Mr L. Rattenbury, solicitor for the appellant, submitted that the appellant had now received legal advice and understood he was guilty of not providing the relevant documents and the appellant would like an opportunity to provide an explanation for his behaviour. It was submitted:

If the appellant would have received legal advice he would have paid the penalty notice of $500. Unfortunately he now has to pay a fine and costs of $7651.50. This represents a penalty 15 times greater than the penalty notice.

10 The appellant appeals against the severity of sentence, but not against the award of costs. He has also advised the Court that he does not seek costs of the appeal, should he be successful. The appellant sought leave to adduce evidence as to the subjective features of this matter. This was not opposed by the respondent. We shall admit the further evidence.

11 The respondent submitted that s 174(5) of the Workers Compensation Act is an important tool used to ensure that an employer has disclosed the correct number of employees and accurately described their occupation, so as to ensure the correct premium has been paid under a policy of insurance issued by an insurer.

12 The respondent also submitted that the maximum penalty of $55,000 for noncompliance reflects how seriously Parliament considers a breach of the section. Any penalty imposed must carry a strong measure of both specific and general deterrence.

13 The respondent further submitted that the decision of the Chief Industrial Magistrate represented a proper exercise of his Worship's discretion and that, in particular, the penalty fell within the permissible range of his Worship's sentencing discretion.

14 The grant of leave to appeal was not contested by the respondent. We have determined, in all the circumstances, to grant leave to appeal.

15 There are few cases which come before the Full Bench involving prosecutions under the Workers Compensation Act. The case of Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) (2001) 104 IR 204 involved an appeal from a successful prosecution for a breach of s 155(1) of the Workers Compensation Act 1987, as to the requirement that an employer obtain and maintain a policy of insurance for workers compensation purposes.

16 In that case the Full Bench cited the following passage of the Chief Industrial Magistrate's decision in WorkCover Authority of New South Wales (Inspector Fester) v Lantry (unreported, Chief Industrial Magistrate, Matter No 94/1163, 9 December 1994), in relation to the purposes of the Workers Compensation Act:

The main purpose or object of the legislation is 'to provide an efficient, equitable and affordable workers compensation system, to promote the rehabilitation of injured workers and to reinforce measures to improve safety and minimise accidents in the workplace.' (Hansard, 28 May 1987, Second Reading Speech Legislative Council). Of particular concern to the Government of the day was the growth of high workers compensation costs.

Workers compensation legislation is social legislation. The assumption behind the legislation is that industrial society creates inevitable hazards and therefore society ought to bear the cost by spreading the loss. Therefore, the Act creates a compulsory insurance scheme for employers to contribute to the scheme to minimise the costs to the community.

17 We consider that this statement is also applicable as a description of the purposes of s 174 of the Workers Compensation Act. It follows that we accept the thrust of the respondent's submissions as to the importance of s 174 of that Act. The single question in this matter concerns the severity of the penalty. In evaluating that question, we have had regard to the following matters:

1. The nature and purpose of s 174 of the Workers Compensation Act. General deterrence is, therefore, a significant feature of this matter.

2. The appellant continues to operate the same business. He has not, until today, produced to the WorkCover Authority any of the records required by the order issued to him. Specific deterrence has, therefore, also featured significantly in these proceedings.

3. The subjective features of this matter which arose from the fresh evidence called before us (which was not, therefore, before the Chief Industrial Magistrate). We have also had regard to the matter being a first offence.

18 We have concluded, in the light of the fresh evidence, that the penalty in this matter was manifestly excessive. We have decided therefore to uphold the appeal. We have also decided to set aside the penalty imposed by his Worship and to impose a penalty of $2,000 with a moiety to the respondent.

19 We note, in addition to our earlier remarks in relation to the question of costs, that the respondent sought its costs of the appeal, even if the appeal was, in part, successful. We reject that application.

20We accordingly make the following orders:

1. Leave to appeal is granted.

2. The appeal is upheld.

3. The penalty imposed by the Chief Industrial Magistrate is quashed.

4. The appellant is fined in lieu thereof the amount of $2,000 with a moiety to the respondent.

5. There is no order as to costs of the appeal. We note that the costs order below remains unaltered.

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LAST UPDATED: 16/04/2004