Samson Maritime Pty Ltd v Aucote [2014] FCAFC182 – Additional Insurance for Maritime Employees May be Required

This update was prepared with assistance from the Self Insurance Team of Gallagher Bassett Services Pty Ltd

Implications for Employers

The Court essentially found in this case that persons employed on ‘a prescribed ship, on the business of the ship’ may potentially be covered by the Seafarers Rehabilitation and Compensation Act 1992 (the Seafarers Act), despite whether the work the ship is undertaking involves inter-Country or inter-State business, or intra-State business.   To put it another way, the Court held that the Seafarers Act extends and has always extended to more than just registered ships trading inter-State or overseas, but rather, extends to all employees on all registered ships (‘prescribed ships’) if they are owned by an Australian trading corporation, or an Australian financial corporation, or a foreign corporation, no matter where they are trading in Australia or what the business of the ship may be.

Additional insurance cover for some maritime employees previously thought to be covered under State legislation will therefore likely be needed.  These employees will, by the same token, no longer be covered under the State legislation and policies arising from those laws.

Primary Issues

This case was primarily concerned with whether the Commonwealth Administrative Appeals Tribunal (AAT) had jurisdiction to determine an application for compensation under the Seafarers Act.   In short, the question was whether the injured seafarer was covered by the Seafarers Act in the circumstances of his injury.   A number of complex issues of statutory interpretation and constitutional law also arose in the case.

Samson’s Arguments

As described the Court at paragraphs 22 to 24 of its decision, Samson argued that the Tribunal was wrong to interpret subsection 19(1)(a) of the Seafarers Act to extend to cover a prescribed ship that is engaged “in activities with respect to“ trade and commerce between Australia and places outside Australia.  Samson essentially argued that the relevant Samson ship was engaged in activities that were wholly intra-State, being self-contained in and near Cape Lambert in Western Australia.

Next, Samson argued that the Tribunal was in error in construing subsection 19(2) as supporting a conclusion that Mr Samson should be covered by the Seafarer’s Act.  Samson instead argued that subsection 19(2) was governed by, and did not operate outside the scope, or independently, of subsections 19(1) and (1A). I t submitted that because the Seafarers Act dealt with persons employed on prescribed ships who were seafarers, subsection 19(2) could not be read as applying to all employees of an Australian trading corporation who also happened to be seafarers.  Rather, Samson submitted, subsection 19(2) limited the operation of subsection 19(1) and (1A) to a person who was an employee of a trading corporation on a vessel that was engaged in, among other activities, international or inter-State trade and commerce.

Findings

The Court dismissed Samson’s appeal, rejecting the arguments outlined above, and found that its employee, Mr Aucote, was covered by the Seafarers Act.  The Court’s reasoning was legally complex and involved issues of statutory interpretation and constitutional law that are difficult to summarise in the context of a brief update.  The Court’s reasoning was, broad terms, that section 19(2) of the Seafarers Act extended the Seafarers Act ‘to operate in respect of the injury suffered by Mr Aucote because he was employed by Samson, which was a trading corporation’ (see paragraph 59 of the decision).   The Court consequently found that it was not necessary to consider the wider, constitutional, question of whether the Tribunal was correct to decide at first instance that the requirement at section 19(1)(a) of the Seafarers Act that an employee be engaged in employment involving trade or commerce ‘between Australia and places outside Australia’ could include intra-state activities (and thus encompass the employment of Mr Aucote, who was involved in construction of a 1.5 kilometre two sided wharf and associated infrastructure at Port Walcott, in Cape Lambert, in the Pilbara region of Western Australia).  The Court also acknowledged that it had relied on the familiar doctrine that the Seafarers Act was beneficial legislation and should not therefore be interpreted narrowly so as to restrict access to the scheme. 

Subsection 19(1) and 19(2) of the Seafarers Act are reproduced below for ease of reference.  A copy of the Court’s decision can be accessed here.

19 -Application of Act

(1)  This Act applies to the employment of employees on a prescribed ship that is engaged in trade or commerce:

(a) between Australia and places outside Australia; or

(aa)  between 2 places outside Australia; or

(b) among the States; or

(c)  within a Territory, between a State and a Territory or between 2 Territories.

(1A)  In addition, this Act applies to the employment of employees on any prescribed ship that is:

(a) an off-shore industry vessel in relation to which a declaration under subsection 8A(2) of the Navigation Act is in force; or

(b)  a trading ship in relation to which a declaration under subsection 8AA(2) of that Act is in force.

(2) This Act also has the effect it would have if:

(a) a reference to an employer were limited to a reference to a trading corporation formed within the limits of the Commonwealth; and

(b) a reference to an employee were limited to a reference to an employee employed by a trading corporation formed within the limits of the Commonwealth.