Australia: High Court Clarifies That Injured Workers Can Bring Civil Claims Following FWO Prosecutions

In Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28, Justices Bell, Gageler, Keane, Nettle and Chief Justice French unanimously allowed an employee's appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales finding that the employee was prevented (or "estopped") from bringing a civil claim seeking damages for injuries sustained in the workplace following a successful prosecution of the employer by the Fair Work Ombudsman (relating to wage underpayments).

Factual Background. Mr Tomlinson worked at an abattoir operated by Ramsey through a labour hire company called Tempus from 2005 to November 2008. In October 2008, Mr Tomlinson was informed that his services were no longer required and that his employment was to terminate by reason of the redundancy of his position. At the time, Mr Tomlinson made a complaint to the Fair Work Ombudsman relating to entitlements which Mr Tomlinson considered were owing to him on termination of his employment. The Fair Work Ombudsman commenced proceedings against Ramsey alleging contraventions of the relevant Award associated with the termination of Mr Tomlinson's employment (and his colleagues).

Legal Background. The Fair Work Ombudsman's claim could only be established against Ramsey if it could be demonstrated that Ramsey was Mr Tomlinson's true employer (rather than the labour hire company). The Ombudsman was successful in the Federal Court in establishing this, and orders were made for Ramsey to pay penalties for its breaches of the applicable Award.

Mr Tomlinson subsequently brought a claim in the NSW District Court against Ramsey alleging that he had suffered an injury whilst working at Ramsey's abattoir in June 2008. NSW legislation would prevent Mr Tomlinson from bringing such a personal injury claim against Ramsey if Ramsey were Mr Tomlinson's employer (as claims for injuries made at an employee's workplace are to be managed pursuant to the workers' compensation regime). In the District Court proceedings, Mr Tomlinson argued that Tempus was his employer and that Ramsey owed a duty of care to Mr Tomlinson as he was a labour hire worker working at its site. Ramsey argued that Mr Tomlinson was estopped from asserting the District Court proceedings that Tempus was his employer (so that he could pursue a claim against Ramsey for damages associated with personal injury) by reason of the fact that in the Federal Court proceedings, it was asserted (and determined) that Ramsey was his employer (allowing the Court to find them liable for the underpayment of wages).

Decision. At first instance, the District Court found that Tempus was Mr Tomlinson's employer (and held that Ramsey was liable for damages sustained in association with Mr Tomlinson's injury). Ramsey appealed this decision to the Court of Appeal which found that Mr Tomlinson was estopped from arguing that Tempus was his employer (by reason of the previous Federal Court proceedings which found Ramsey to be his employer).

The High Court unanimously upheld Mr Tomlinson's appeal and determined that Mr Tomlinson was not estopped by the Federal Court proceedings from asserting Tempus was his employer because he was not a party to the Federal Court proceedings, they were pursued by the Fair Work Ombudsman (and the Ombudsman could have pursued those proceedings with or without Mr Tomlinson's assistance).

The High Court reverted the matter to the NSW Court of Appeal to determine who Mr Tomlinson's employer was (and consequently, whether Mr Tomlinson's District Court claim should be upheld).

Lessons for Employers. Recently the Fair Work Ombudsman has reached settlements with a number of employers in relation to significant pieces of litigation commenced by the Ombudsman against those employers. If major employers are approached or prosecuted by the Ombudsman, when negotiating settlements with the Ombudsman (and defending prosecutions commenced by the Ombudsman), employers should be mindful that civil claims from individual employees (or groups of affected employees) may follow the resolution of proceedings with the Ombudsman.

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