Supreme Court Rules On Employer’s Principal Place Of Business

Mr Matanagh (the respondent) claims to have been injured on 22 October 2011 while working for the appellant on Christmas Island as an interpreter and translator. The Respondent made a claim for workers’ compensation under the Workers’ Compensation and Injury Management Act 1981 (WA) (WCIM Act).

The appellant disputes that compensation is payable under the WCIM Act, on the basis that the respondent’s employment was not connected to the Territory of Christmas Island for the purposes of the WCIM Act.

The appellant commenced proceedings in the District Court of Western Australia. In those proceedings it sought an order determining that the respondent’s employment was connected with the State of New South Wales, pursuant to s 23C of the WCIM Act. The District Court determined that Christmas Island was the ‘State’ with which the respondent’s employment with the appellant was connected.

The main issue in dispute was whether the reference to an employer’s ‘principal place of business in Australia’ in s 20(4)(c) of the WCIM Act is to:

1. the principal place in Australia from which the employer’s business activities are managed or controlled; or

2. the State or Territory in which the employer’s business activities are principally carried out.

Mitchell J found that New South Wales was the State in which the employer’s principal business activities were managed and controlled and therefore allowed the appeal.
 
The decision was based on the following reasoning:

a)that the phrase ‘the state in which the employer’s principal place of business in Australia is located’ is to be construed as referring to the State or Territory in which the principal place from which the business activities of the employer are controlled or managed is located;

b)the District Court misconstrued s 20 of the WCIM Act by regarding the phrase ‘principal place of business’ as meaning the chief, most important or main place of business from where the employer conducts most or chief part of its business; and

c)the evidence made it clear that the appellant’s business activities were controlled and managed from its head office in Parramatta.

This decision clarifies the interpretation of “principal place of business” for the purpose of determining the State the relevant employment is connected with. In this regard, regard must be had to where the business is controlled or managed, rather than where it principally operates from.

This CASE LAW UPDATE is intended for general information only and you should not act upon it or omit to act on the basis of anything contained herein without first obtaining legal advice in relation to any particular matter or issue.

© Copyright 2015, SRB LEGAL – All Rights Reserved

Date: 29 September 2015

Should you require any further information relating to the above decision, please contact one of the following partners on telephone (08) 9221 3110.