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Illegal employment

1987 Act section 24 Illegal employment >>

Viliami v National Springs &c (1993) 9 NSWCCR 453. Burke CCJ.


"A contract is illegal if its object is illegal. Not so much the status of the parties, though it can be an element. The contract that Mr Mau or Mr Tupa entered into with Hendersons Federal Spring Works was a normal contract of service to perform virtually unskilled work.

There is nothing illegal about the object of the contract. True, Mr Mau, subject to section 83 of the Migration Act as he was, was precluded from entering into such a contract and the same section provided that, if he did, he was subject to a penalty up to $5,000.

The fact that a penalty is incurred by entering into a contract does not necessarily void the contract.

If it is void, it is void ab initio. One could say if the contract is void, ab initio, how has he committed any illegality? Therefore, he cannot be fined.

Perhaps an illustration (and both parties could take comfort with it) is Finemores Transport Pty Ltd v Cluff (1973) 47 ALJR 778. Mr Cluff was a policeman. He was moonlighting in a job with Finemores Transport. The Police Regulation Act precluded policemen from engaging in other employment. The penalty provided, incidentally, was dismissal from the Police Service.

At the hearing before the Workers' Compensation Commission it was held that the contract was illegal and the discretion vested by the then section 40, in the same terms as the current section 24, was exercised. The matter went on appeal.

There was no appeal as to the finding that the contract was illegal. Mr Justice Jacobs, obiter in the course of his judgment, had the throw-away line that he was not convinced that the contract, per se, was illegal just because a man could be penalised for entering into it.


However, in the case of Mr Mau, while he was under disability and subject to penalty for entering into a contract of service, it does not in my view make the contract of service illegal.

Even if it did, section 24 vests a discretion.

The basis on which the exercise of discretion would be withheld would be to show the disapprobation of the Court to the particular conduct undertaken.

Frankly, I do not think there is any moral or social disgrace involved in a man trying to earn a living to support himself and a wife and family.

It is not the sort of thing which a court would view as turpitude warranting a harsh view, and taking the view that any discretion vested by section 24 should not be exercised.

Actually, it is surprising but I do not think there is one case where the discretion has ever failed to be exercised in favour of a worker. Were it relevant, I would certainly exercise it in favour of this worker.

The prohibition contained in section 83 of the Migration Act, however, has not spent its force once you determine legality or otherwise of the contract.

The applicant claims in respect of incapacity. He is undoubtedly incapacitated as a result of injury. That incapacity is patently partial. He was back doing some work until the Immigration Department took exception to it. It thereby came to an end.

Section 40 provides for compensation not exceeding the difference between the amount he would probably have been earning as a worker, had he remained uninjured, and the amount he is now earning or able to earn in some suitable occupation. The applicant probably would have been earning nothing uninjured.

The Department of Immigration having ascertained that he was in breach of section 83 of the Migration Act, had actively intervened and confiscated his Passport and done all those sorts of things and, indeed is, considering his status as a resident of Australia at the present time.

He is not earning; therefore the alternative limb of section 40 operates.

What is he able to earn? Legally, he is able to earn nothing. He is precluded by statute under penalty.

To value his capacity in a reasonably accessible labour market, ignoring for the moment the illegality, is one thing.

To value his capacity in a reasonably accessible labour market, when there is no labour market reasonably accessible to him by operation of law, seems to me to end up you can do the mathematics under section 40; you can say, "Well the Department of Immigration would probably have caught up with him in any event"; therefore, he would probably be earning nothing; for the same reason he is able to earn nothing in any work that he can do in this country now; therefore, the difference of nothing from nothing is nothing.

Even if you find that he would have earned something or other by some means or other, it is merely giving an approbation to illegality and I do not think it is the function of this Court to do that.

True, the authorities discuss the possibilities of the operation of section 40 coming out to a nil result, concede that it may happen, but indicate it would be exceedingly rare where a man was incapacitated the operation of the section would render a nil return as it were.

I think this is the exception and in my view the applicant is not entitled to a weekly payment. The contract being illegal and exercising the discretion or the contract not being illegal and not needing to exercise the discretion either which way, it comes out the same thing.

Perhaps the illustration comes from McHugh JA, when he was a member of the Court of Appeal in Australian Wire Industries v Nicholson, Court of Appeal, No. 302/84, 4 February 1985, unreported. He pointed out that the purpose of section 40 was to compensate a man for the loss of his earning capacity and he went on to say: "Money that would not be earned is not lost for that purpose."

I think, as phrased, it is probably a bit wide. There are patent exceptions to that but I think this is one of the cases where it operates according to his tenor.

The man really has not lost anything because he is precluded from earning anything in any event injured or uninjured. For those reasons, I do not think he is entitled to a weekly payment."

Award of permanent loss compensation.

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