Constitutional law and damages – inconsistency between state and federal law…

…Pt 5, Workers Compensation Act 1987 (NSW) and s545, Fair Work Act 2009 (Cth)

In Leggett v Hawkesbury Race Club Limited (No.4) [2022] FCA 622 (30 May 2022), the Federal Court (Rares J) determined issues of inconsistency between Part 5 of the Workers Compensation Act 1987 (NSW) (WC Act) and section 545 of the Fair Work Act 2009 (Cth) (FW Act), in relation to constitutional law and damages.

S545 of the FW Act affords the relevant court the power to make any order the court considers appropriate, including compensation, for adverse action a person has suffered pursuant to s340 of the FW Act. Pt 5 of the WC Act includes restrictions on the award of damages for an injury to a worker.

The applicant argued that she was entitled to compensation, pursuant to s545 of the FW Act, that was undisturbed by any restrictions on the award of damages for an injury to a worker under the WC Act (at [5]). The applicant sought damages for the applicant’s psychiatric injury under both, or alternatively, the WC Act (work injury damages restricted by the statute) or s545 of the FW Act (as compensation uncapped by the statute) (at [10]).

The respondent argued that the WC Act and the FW Act operate concurrently, and that the applicant’s work injury damages claim should be dismissed so that she was not doubly compensated for the same injury (at [22]-[23]).

First, the court dealt with the constitutional issue. Pursuant to s109 of the Australian Constitution, a state law is invalid to the extent that it is directly, or indirectly, inconsistent with a law of the Commonwealth (at [25]). Among other things, Pt 5 of the WC Act regulates the ability to claim damages against an employer for negligence, “in respect of an injury caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action” (at [26]).

To the extent that Pt 5 is concerned with damages (as defined in s149(1) of the WC Act) and provides for remedies associated with termination of employment, or conduct that adversely affects an employee in employment (as captured by s26(2)(b)(v) and (vi) of the FW Act), then the WC Act is excluded from operating to limit the relief that a court may award, under s545 of the FW Act.


In these circumstances the WC Act would have moved beyond the realm of workers compensation, which is not an excluded matter under s27(1)(c) of the FW Act (at [35]).

Section 545(1) and (2)(b) of the FW Act cover the field on the compensation for loss that a person suffers, due to a contravention of a civil remedy provision under the FW Act (at [36]). In addition, the WC Act as a law of a state cannot compel a court exercising federal jurisdiction as to the manner in which to exercise that jurisdiction (at [38]).

The applicant was entitled to full compensation under s545(2)(b) of the FW Act, for the past and future economic loss the applicant suffered because of the respondent’s contraventions of the FW Act. This was undisturbed by the WC Act (at [40]). 

In relation to the damages issue, the court returned to its view that Pt 5 of the WC Act does not operate to regulate any remedy provided by the FW Act, in relation to conduct that adversely affects an employee in their employment.

However, the court can (and normally should) take into account any workers compensation that an employee has obtained – for an injury related to conduct that adversely affected their employment – when the court is determining any loss for which compensation should be ordered, pursuant to s545 of the FW Act. This did not change the view that an employee’s entitlement to obtain, and keep, workers compensation payments is separate to the compensation that may be appropriate for that employee to receive, pursuant to s545(2)(b) of the FW Act (at [58]).

The court held that the applicant was entitled to compensation under s545(2)(b) of the FW Act, and that this compensation would be a net amount of the applicant’s overall loss. This meant that the respondent would obtain a ‘credit’ for the amount of the applicant’s total compensation, which would reduce the quantum of an order for statutory compensation for the applicant, pursuant to s545(2)(b) of the FW Act (at [59]).


Nadia Stojanova is a barrister at the Victorian Bar, ph 0480 254 662 or email The full version of these judgments can be found at Numbers in square brackets refer to a paragraph number in the judgment.

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