Does a statute of limitations apply to certain proceedings under the former Workplace Relations Act 1996?

A pending decision by the Full Court of the Federal Court on the issue of statute of limitations will have significant implications for a number of current proceedings before the Courts, that allege certain contraventions of the former Workplace Relations Act 1996 (WR Act).

In August 2012, the Full Court heard an appeal by the Fair Work Ombudsman (FWO), against the decision of Federal Magistrate Raphael in Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited & Ors [2012] FMCA 122 (FWO v Toyota).

The decision at first instance by the Federal Magistrates Court  involved an application by the FWO for declarations and penalties against Toyota for breaches of the WR Act.  However, Toyota claimed that the FWO’s application for penalties under the WR Act were subject to the 2 year limitation period set out in the NSW Limitation Act 1969 (NSW) (the NSW Act), and had been brought out of time.

The Federal Magistrates Court held that as the WR Act did not specify a limitation period, the NSW Act applied by virtue of section 79(1) of the Judiciary Act 1903 (Cth), which provides that:

“The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that state or Territory in all cases to which they are applicable”.

The Federal Magistrates Court agreed with Toyota that the relevant period was 2 years as provided for in section 18(1) of the NSW Act.  This provision states that:

“An action on a cause of action to recover a penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which theca sue of action first accrues to the plaintiff or to a person through whom the plaintiff claims”.

As the proceedings had been brought more than 2 years after the cause of action first arose, the Federal Magistrates Court summarily dismissed the FWO’s application for penalties. 

The decision has implications for a range of proceedings under the WR Act which do not have specified limitation periods in the WR Act, including the sham contracting provisions under section 900. 

The most significant proceeding, at least from a public perspective, is the prosecution of former Health Services Union National Secretary (and former Federal Member of the House of Representatives) by Fair Work Australia, in relation to alleged breaches of the obligations on officers of registered organisations.  These proceedings (General Manager of Fair Work Australia v Craig Thomson (VID798/2012) were initiated on 15 October 2012, however relate to contraventions of the WR Act that occurred before 30 June 2009, well outside the 2 year statute of limitations that would apply under Victorian and NSW law. 

Thomson’s solicitors have adopted the ‘Toyota’ argument in his Defence, pending the Full Court appeal decision.

The decision will not have any implications for contraventions of the Fair Work Act 2009 (FW Act), which clearly specifies a 6 year statute of limitations for all contraventions.