Wipro Limited v State of New South Wales

1. [1]

   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.

2. [2]

   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:

3. [3]

   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

1. [4]

   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

1. [5]

   The following description of the uncontentious factual circumstances reflects that given in the plaintiff’s written submissions.

2. [6]

   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.

3. [7]

   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.

4. [8]

   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.

5. [9]

   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.

6. [10]

   Mr Rawat’s service totalled 10 years, 8 months and 22 days [elsewhere referred to as 23], comprising:

   1. (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. (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.

7. [11]

   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”.

8. [12]

   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)

1. [13]

   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:

2. [14]

   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.

3. [15]

   Section 8 was in the following form at material times:

4. [16]

   The present form of s 8 is as follows:

5. [17]

   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

1. [18]

   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.

2. [19]

   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:

3. [20]

   To similar effect the plurality of the High Court said in BHP Group Ltd v Impiombato [2022] HCA 33 at [59]; (2022) ALJR 956:

4. [21]

   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]:

5. [22]

   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

1. [23]

   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.

2. [24]

   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.

3. [25]

   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:

4. [26]

   The Commission summarised its view at 254 as follows:

5. [27]

   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.

6. [28]

   The Commission reasoned at 74 as follows:

7. [29]

   It added at 76:

8. [30]

   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:

9. [31]

   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]:

10. [32]

    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.

11. [33]

    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]:

12. [34]

    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]:

13. [35]

    Having considered Cummins South Pacific in some detail, their Honours concluded that that decision was plainly wrong and should not be followed.

14. [36]

    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]).

15. [37]

    As in the joint judgment, Niall JA was critical of the decision in Cummins, his reasoning including the following at [37]:

16. [38]

    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.

17. [39]

    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.

18. [40]

    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.

19. [41]

    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.

20. [42]

    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.

21. [43]

    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.

22. [44]

    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.

23. [45]

    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.

24. [46]

    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).

25. [47]

    I turn now to address various submissions made by the first defendant.

26. [48]

    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.

27. [49]

    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).

28. [50]

    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).

29. [51]

    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]).

30. [52]

    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]).

31. [53]

    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.

32. [54]

    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.

33. [55]

    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.

34. [56]

    Accordingly, I propose the following orders:

    1. (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. (2)

       Order the first defendant to pay the plaintiff’s costs of the proceedings.

35. [57]

    SIMPSON AJA: I agree with Macfarlan JA.

36. [58]

    BASTEN AJA: I agree with Macfarlan JA.