Acme Engineering Pty Ltd v Fuchs
[2006] TASSC 43
•9 June 2006
[2006] TASSC 43
CITATION: Acme Engineering Pty Ltd v Fuchs [2006] TASSC 43
PARTIES: ACME ENGINEERING (TAS) PTY LTD
T/AS ACME PRECISION & GENERAL
ENGINEERING TOOL MAKERS
v
FUCHS, Detlef
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 17/2006
DELIVERED ON: 9 June 2006
DELIVERED AT: Hobart
HEARING DATE: 1 May 2006
JUDGMENT OF: Evans J
CATCHWORDS:
Workers Compensation – Proceedings to obtain compensation – Determination of claims – Appeals, judicial review and stated cases – Question of law – Generally – Partial incapacity – Whether reduction should be made to weekly payments.
Workers Rehabilitation and Compensation Act1988 (Tas), s69B(3).
Aust Dig Workers Compensation [340]
REPRESENTATION:
Counsel:
Appellant: M Wilkins
Respondent: J E Green
Solicitors:
Appellant: Page Seager
Respondent: John Green
Judgment Number: [2006] TASSC 43
Number of paragraphs: 28
Serial No 43/2006
File No LCA 17/2006
ACME ENGINEERING (TAS) PTY LTD T/AS ACME PRECISION
& GENERAL ENGINEERING TOOL MAKERS v DETLEF FUCHS
REASONS FOR JUDGMENT EVANS J
9 June 2006
Acme Engineering (Tas) Pty Ltd ("the employer") appeals against a determination by a Commissioner of the Workers Rehabilitation and Compensation Tribunal as to the weekly payments due to Detlef Fuchs ("the worker") for his partial incapacity for work.
On 30 September 2004, the worker, a toolmaker, crushed his right index finger in the course of his employment with the employer and was in consequence entitled to compensation pursuant to the Workers Rehabilitation and Compensation Act 1988, s25. Weekly payments, together with medical and other expenses, were duly paid by the employer in respect of the injury. The worker returned to work with the employer on 11 October 2004 and worked with the employer without loss of pay until 18 January 2005 when he was made redundant. Thereupon the worker claimed from the employer compensation by way of weekly payments, together with a lump sum payment pursuant to s71 for a permanent incapacity arising from his injury. These claims were disputed by the employer and were referred to the Tribunal by the worker. The Commissioner, who dealt with the reference, found that by reason of the worker's injury, he suffered from a permanent impairment and was partially incapacitated for work in that he was unfit to perform all the tasks required of a toolmaker. The Commissioner assessed the worker's lump sum entitlement pursuant to s71 and no challenge is made to that assessment.
As to the worker's claim for weekly payments arising from his partial incapacity, the Commissioner said:
"By s69(1)(b) compensation may be payable where partial incapacity results from an injury 'for the period of that incapacity equal to the difference between the worker's normal weekly earnings and the amount that the worker is earning or would be able to earn in suitable employment or business during that period of incapacity.' By s69(2) 'normal weekly earnings' in relation to a worker who is incapacitated for work, means the average weekly earnings of the worker over the period of 12 months ending at the commencement of the period of incapacity.
When did the period of the worker's partial incapacity commence? The worker worked for the employer on a full-time basis to 18 January 2005 and I infer was paid his ordinary wage in full. During this time he was able, with those difficulties which I have already noted, to carry out the tasks required of him by his employer. In these circumstances it is my view that the worker did not become incapacitated for the purposes of the Act until 19 January 2005, this being the date, because of his retrenchment, that he entered the labour market seeking work in circumstances where, as I have found, his working capacity was reduced because he was unable to carry out all the tasks required of a toolmaker. What was the worker's normal weekly earnings for the twelve months ending at this date? It was the worker's evidence that he commenced working for the employer in May 2004 (the Employer's Report shows the starting date to be 5 May) and that his salary was $820.00 per week. Prior to this he was employed by Techno Master for $1500.00 per week. I do not have any evidence to indicate any interval between these employments. It is noted that the Employer's Report states the worker's normal weekly earnings to be $820.00. This document is dated 9 March 2005 and appears to be signed by 'Robert P Haynes' as the employer's financial manager. It seems obvious that the figure shown in the Employer's Report represents the worker's weekly wage rather than a calculation of his normal weekly earnings for the previous 12 months because it is not reflective of the worker's significantly greater wage paid by Techno Master. Although the evidence is somewhat scant it is, in my view, sufficient to enable me to determine the worker's normal weekly earnings to be $1,016.15 which I calculate as follows:
19.01.04 to 04.05.04
15 weeks @ $1500 per week = $22,500
05.05.04 to 18.01.05
37 weeks @ $820 per week = $30,340
$52,840 ÷ 52 weeks = $1016.15
I now turn to consider the amount the worker 'is earning or would be able to earn.' It is clear from the evidence that the worker does not have any current earnings. Multiple attempts by him to secure employment up to July 2005 have been unsuccessful. However, it is not the worker's case that he is unable to earn income from suitable employment. Rather, it is his case, as I understand it, that he is unable to earn income undertaking duties which involve the fine work and manipulative skills required in tool making but is otherwise able to earn as a tradesperson in the engineering industry. The worker is not asserting, relying upon s69(4)(c), that his failure to secure this latter work is a consequence wholly or mainly of his injury. Instead it is the worker's case that he is entitled to a weekly payment represented by the difference between his normal weekly earnings and the earnings of such a tradesperson. A copy of the applicable industrial award being the Metal and Engineering Industry Award was tendered into evidence and it is my understanding that the relevant tradesman's rate under that Award is $578.00 per week.
I am prepared to accept that the work of a tradesperson in the engineering industry other than as a toolmaker is suitable employment for the worker having regard to the effects of his injury, his vocational training and experience. I do not have any evidence to indicate that there is other suitable employment for the worker which would provide him with earnings greater than those payable for such a tradesman. In all the circumstances I accept that the weekly payment should be calculated by reference to the difference between the worker's normal weekly earnings and the tradesman's award rate to which I have referred. As I have said previously a bundle of medical certificates were tendered into evidence. They cover the 43.5 week period from 19 January to 31 October 2005 and indicate an ongoing incapacity. The worker, as I understand it does not seek compensation beyond this latter date. Accordingly, I determine that the worker has an entitlement to weekly payments in the sum of $19,059.52 represented by this calculation:
43.5 weeks x ($1016.15 - $578.00)
= 43.5 weeks x $438.15
= $19,059.52
There will be an order that within 14 days the employer pay to the worker the sum of $19,059.52."
The employer appeals against the determination as to the weekly payments due to the worker on the following grounds:
"1The Tribunal erred in law in failing to apply Section 69B of the Workers Rehabilitation and Compensation Act, 1988, in determining the quantum of the weekly payments to which the worker/Respondent was entitled.
2The Tribunal erred in law in determining that the worker's/Respondent's normal weekly earnings were $1,016.15, when there was no evidence to allow it to do so.
3The Tribunal erred in law in including in the calculation of earnings, for the purposes of calculating normal weekly earnings, the earnings of the worker/Respondent whilst employed by Techno Master when there was no evidence that such earnings were earnings in the period of twelve (12) months ending at the commencement of the period of incapacity as required by Section 69(2) of the Workers Rehabilitation and Compensation Act, 1988.
4The Tribunal erred in law in not determining that the weekly rate payment payable to the worker was $583.46, when it had no evidence to entitle it to make any other finding.
5The Tribunal erred in determining that the worker/Respondent was able to earn as a Tradesperson in the Engineering Industry at the rate of $578.00 per week, when there was no evidence that the worker/Respondent was capable of such work.
6The Tribunal erred in law in determining that the worker/Respondent was able to earn as a Tradesperson in the Engineering industry, and that such employment was suitable employment when there was no evidence to enable the Tribunal to make such a finding."
At this point it is convenient to set out relevant portions of the following provisions:
"3 ¾ (1) In this Act, unless the contrary intention appears ¾
'weekly payment' means a weekly rate payment determined in accordance with section 69."
"69 Amount of compensation in case of incapacity
(1) Subject to this section, where total or partial incapacity for work results from an injury suffered by a worker and where the existence of such total or partial incapacity is supported by a certificate in a form approved by the Board signed by an accredited medical practitioner or accredited person, the compensation payable to him under this Act is, in addition to any lump sum that may be payable under section 71 or 72 in respect of that injury ¾
(a) in the case of the total incapacity of the worker for work, weekly rate payments equal to ¾
...
(b) in the case of the partial incapacity of the worker for work, weekly rate payments for the period of that incapacity equal to the difference between the worker’s normal weekly earnings and the amount that the worker is earning or would be able to earn in suitable employment or business during that period of incapacity.
(2) In this section, 'normal weekly earnings' in relation to a worker who is incapacitated for work, means the average weekly earnings of the worker over the period of 12 months ending at the commencement of the period of incapacity.
…
(4) The foregoing provisions of this section have effect subject to the following provisions of this subsection:
(a) …
(b) when the question of the amount that a worker is earning or would be able to earn arises, if it appears to the Tribunal that, because of the injury that the worker has suffered (including the physical disfigurement of the worker) he is, or will be, unable to obtain employment or to remain in reasonably regular employment, the Tribunal may decide that the worker is incapacitated by the injury, either totally or partially and either permanently or temporarily, as the circumstances of the case require, and, on the Tribunal so deciding, compensation is payable to the worker in accordance with this Division.
(c) where a worker -
(i)has so far recovered from an injury suffered by him as to be fit for employment (but only for employment of a more limited kind than the employment in which he was engaged before the date when he suffered the injury); and
(ii)satisfies the Tribunal that he has taken all reasonable steps to obtain, and has failed to obtain, employment of a kind referred to in subparagraph (i), and that his failure to obtain that employment is a consequence wholly or mainly of the injury (including the physical disfigurement) of the worker
the Tribunal may, notwithstanding any other provision of this Act or any earlier determination of the Tribunal under this Act, or order, award, determination or decision made by a judge under the repealed Act, in respect of that worker, determine that his incapacity shall continue to be treated as total incapacity for such period and subject to such conditions as the Tribunal thinks fit and, on the making of the determination, compensation is payable in accordance with this Division."
"69B Period for which benefits are payable
(1) The weekly payment determined under section 69 is to be payable as follows:
(a)100% of the weekly payment for the first 13 weeks of the period of incapacity following the date of the initial incapacity;
(b)85% of the weekly payment for the period of incapacity exceeding 13 weeks but not exceeding 78 weeks from the date of the initial incapacity;
(c)80% of the weekly payment for the period of incapacity exceeding 78 weeks but not exceeding 9 years from the date of the initial incapacity.
(2) On the expiration of 9 years after the date of the initial incapacity, a worker ceases to be entitled to weekly payments under section 69.
(3) An amount payable under subsection (1)(b) or (c) is not to be less than 70% of the basic salary or the weekly rate payment determined under section 69, whichever is the lesser.
(4) For the purposes of subsection (3), the entitlement of a worker who, at the time of injury was working on a part-time or casual basis, is to be calculated as if the basic salary were an amount which bears the same proportion to the actual basic salary as the number of hours during which the worker was engaged immediately before the period of incapacity bore to full-time employment.
(5) The amendments to subsections (1) and (2) effected by the Workers Rehabilitation and Compensation Amendment Act 2004 apply to all claims for compensation relating to periods of incapacity after the commencement of that Act with respect to injuries occurring on or after 1 July 2001.
(6) In this section ¾
'period of incapacity' means ¾
(a)a period of incapacity for work, whether partial incapacity, total incapacity or a combination of partial incapacity and total incapacity, starting on the date of the initial incapacity; and
(b)in the case of separate periods of incapacity for work resulting from the same injury, the aggregate of those periods."
Ground 1
"1The Tribunal erred in law in failing to apply Section 69B of the Workers Rehabilitation and Compensation Act 1988, in determining the quantum of the weekly payments to which the worker/Respondent was entitled."
As can be seen from the definition of "weekly payment" in s3(1), nothing turns on the use of the term "weekly rate payment(s)" in ss69 and 69B(3) and the use of the term "weekly payment(s)" in s69B(1) and (2). The terms have the same meaning.
Section 69B(1) expressly applies to "The weekly payment determined under s69" and that section expressly determines such payments in respect of "total or partial incapacity". The language used makes it plain that weekly payments to which s69B applies includes those in respect of a partial incapacity. An incidental reason for so concluding is that if not, the temporal limit placed on the payment of weekly payments by s69B(2) would not apply to such payments. Nevertheless, in the course of argument, both counsel expressed considerable uncertainty about the meaning of s69B(3) and counsel for the appellant went so far as to contend that s69B(3) only applies to weekly payments in respect of a total incapacity. I am unable to so construe it.
The understandable objective of s69B(3) is to confine the application of the reduction provisions in subs(1)(b) and (c) to weekly payments that exceed a minimum amount specified as 70 per cent of the basic salary (the basic salary is declared annually pursuant to s66). That objective is achieved by subs(3) providing that the amount payable under subs(1)(b) or (c), the reduced payment, "is not to be less than 70% of the basic salary or the weekly rate payment … whichever is the lesser". In my view subs(3) must be read as requiring a comparison between 70 per cent of the basic salary and the full amount of the weekly payment, not 70 per cent of the weekly payment. To read subs(3) as if the qualification "70%" applies to the weekly payment as well as to the basic salary would render it nugatory, as the maximum reduction provided for in subs(1)(b) and (c) is to 80 per cent of the weekly payment. Accordingly, when the weekly payment is "the lesser" for the purposes of subs(3), it is the protected amount below which there can be no reduction, and obviously enough the weekly payment cannot be reduced. However, when the weekly payment is greater than 70 per cent of the basic salary, the latter is "the lesser" for the purposes of subs(3) and there is room to reduce the weekly payment. If the weekly payment exceeds 70 per cent of the basic salary by more than 20 per cent (the maximum reduction provided for by subs(1)(c)), there is room to make all the reductions to the weekly payment envisaged by subs(1)(b) and (c). If the weekly payment exceeds 70 per cent of the basic salary by less than 20 per cent, there is still room to reduce the weekly payment, but consistent with subs(3), the reduction cannot be to an amount below the protected amount, 70 per cent of the basic salary.
In the present case, the worker's claim was for a period of 43.5 weeks from 19 January 2005. The amount of his weekly payment for this period was calculated by the Commissioner, pursuant to s69, at $438.15. In accordance with s69B(1)(a), the worker was entitled to 13 weeks at that rate. During 2005, the basic salary was $508.74 and 70 per cent of $508.74 is $356.11. That figure being less than the amount of the worker's weekly payment, $356.11 was the protected amount for the purposes of subs(3) when it came to assessing whether a reduction could be made to the worker's weekly payment pursuant to subs(1)(b). Applying subs(1)(b), the reduced payment was $372.43 (85 per cent of the weekly payment of $438.15) and as that figure is greater than the protected amount, $356.11, subs(3) did not bar making the reduction. Accordingly, the correct calculation of the worker's entitlement to weekly payments is:
13 weeks @ $438.15
$5,595.95 30.5 weeks @ $372.43 (85% of $438.15) $11,359.12 $16,955.07
Ground 1 succeeds.
Grounds 2, 3 and 4 relate to the calculation of the worker's weekly payment for the period of his incapacity. Consistent with s69(1)(b), that payment is "equal to the difference between the worker's normal weekly earnings and the amount that the worker … would be able to earn in suitable employment … during that period of incapacity". "Normal weekly earnings" means the average weekly earnings of the worker over the period of 12 months ending at the commencement of the period of incapacity, s69(2). A number of provisions referable to this calculation are contained in s70. For present purposes, they are not pertinent.
I first turn to ground 3 as the argument advanced in support of that ground is the argument that was also relied upon in support of grounds 2 and 4.
"3The Tribunal erred in law in including in the calculation of earnings, for the purposes of calculating normal weekly earnings, the earnings of the worker/Respondent whilst employed by Techno Master when there was no evidence that such earnings were earnings in the period of twelve (12) months ending at the commencement of the period of incapacity as required by Section 69(2) of the Workers Rehabilitation and Compensation Act, 1988."
The appellant does not challenge the Commissioner's conclusion that for the purposes of calculating the worker's normal weekly earnings, the relevant period was 12 months from 19 January 2004 to 18 January 2005 and that for the period from 5 May 2004 to 18 January 2005 the worker's relevant earnings from the appellant were $30,340. The appellant's contention is that there was no evidence that, as found by the Commissioner, between 19 January 2004 and 4 May 2004 the worker earned $1,500 per week whilst employed by Techno Master.
Save for ground 1, each ground of appeal alleges that there was no evidence to support the finding challenged and that this was an error of law. The drafting of the grounds reflects the need for the appellant to establish an error of law, s63. As to an error of law when dealing with a factual determination, see Hanlon v McKay Investments Pty Ltd (2001) 10 Tas R 247, Ambulance Service of New South Wales v Daniel & Anor [2000] NSWCA 116 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139.
The worker's evidence-in-chief was that he came to Tasmania in November 2004, he initially worked for Techno Master where he was paid $1,500 per week, that company went out of business, he then obtained employment with the appellant, and that employment commenced on 5 May 2004. Whilst acknowledging that this evidence was "somewhat scanty", the Commissioner concluded that it established the challenged finding. The Commissioner was entitled to so conclude. The worker's evidence on these matters was not challenged in cross-examination and the proposition that there was no interval between the cessation of the worker's employment with Techno Master and the commencement of his employment with the appellant was supported by an exhibit which detailed the worker's employment history. That exhibit recorded that the worker's employment with Techno Master concluded in May 2004 and his employment with the appellant began in May 2004. It being acknowledged that the worker's employment with the appellant began on 5 May 2004, in the absence of evidence to the contrary, it was open to conclude that there was no break in the continuity of his employment.
The contention that there was no evidence to support the challenged finding is rejected. There was sufficient evidence to found it.
Ground 3 fails.
Grounds 2 and 4
"2 The Tribunal erred in law in determining that the worker's/Respondent's normal weekly earnings were $1,016.15, when there was no evidence to allow it to do so.
4 The Tribunal erred in law in not determining that the weekly rate payment payable to the worker was $583.46, when it had no evidence to entitle it to make any other finding."
The argument advanced in support of these grounds was the argument that I have rejected in relation to ground 3. The grounds fail.
Grounds 5 and 6
"5 The Tribunal erred in determining that the worker/Respondent was able to earn as a Tradesperson in the Engineering Industry at the rate of $578.00 per week, when there was no evidence that the worker/Respondent was capable of such work.
6 The Tribunal erred in law in determining that the worker/Respondent was able to earn as a Tradesperson in the Engineering industry, and that such employment was suitable employment when there was no evidence to enable the Tribunal to make such a finding."
The worker's claim for weekly payments, as explained by his counsel to the Commissioner, was put on the alternative bases open under s69. The worker had been unable to obtain employment between 19 January 2005 and 31 October 2005. Accordingly it was open to him to claim full weekly payments during that period pursuant to s69(4)(c) on the basis that he had taken all reasonable steps to obtain employment, had failed to do so because of his partial incapacity, and in consequence should be compensated as if totally incapacitated. The alternative claim open to the worker was for reduced weekly payments based on s69(1)(b), that is, that the worker was entitled to weekly payments during the period of incapacity less "the amount that the worker … would be able to earn in suitable employment … during that period of incapacity". In the course of explaining the worker's case to the Commissioner, counsel for the worker conceded that if the Commissioner rejected the claim for full weekly payments based on s69(4)(c), but allowed the claim pursuant to s69(1)(b), the weekly payments should be reduced by $578 per week, that being the amount the worker would have earned in employment covered by the Metal and Engineering Workers' Award.
The Commissioner misapprehended the way in which the worker's case was advanced. In his detailed reasons for determination, the Commissioner did not consider the worker's claim on the basis of s69(4)(c) and said that the worker was not relying on that provision. The worker has taken no issue with the course adopted by the Commissioner.
As to the worker's claim pursuant to s69(1)(b), the Commissioner found that work of a trades person in the engineering industry, other than as a toolmaker, was suitable employment for the worker and that pursuant to the applicable industrial award, the worker had been able to earn $578 per week from that employment during the period of his incapacity.
Grounds 5 and 6 in substance contend that there was no evidence that the worker was capable of working as a tradesman in the engineering industry or that such work was suitable employment for him and in consequence the Commissioner erred in finding that the worker was able to earn $578 per week from such work.
As recognised by the Commissioner, the worker bore the onus of proving his partial incapacity for work and its reflection on the degree of his loss of ability to earn; J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 and Pickett v Selected Joinery Pty Ltd A87/1995. Again, as recognised by the Commissioner, that onus could, in some circumstances, be discharged by little in the way of evidence. In Woden Valley Glass v Psaila (1994) 124 ALR 387, Miles J, with whom Hill and Cooper JJ agreed, said at 396:
"Whilst the onus lies on the worker to establish the extent of his partial incapacity for work for the purpose of assessing the rate of compensation payable, there is no reason why the general principle applicable to damages is not applicable to workers' compensation law. That is to say, that once it is established that the injury has resulted in an incapacity for work which contributes to the worker's inability to earn in a suitable occupation or business, and although there may be other contributing factors, the circumstances may require the party responsible to show the extent to which extraneous factors contribute to that inability: Watts v Rake (1960) 108 CLR 158, in which Dixon CJ said at 160:
'If the disabilities of the plaintiff can be disentangled and one or more traced to causes in which the injuries he sustained through the accident play no part, it is the defendant who should be required to do the disentangling and to exclude the operation of the accident as a contributory cause.'
Whilst it may be going too far to say that there is an evidentiary burden cast upon an employer, an evidentiary burden to show what alternative employment opportunities and likely earnings were open to a partially incapacitated worker, a workers' compensation tribunal may well require little in the way of evidence to establish that the worker has discharged the onus of showing that he is unable to earn in a suitable occupation or business."
In the present case, the onus on the worker was to establish what he had been able to earn in suitable employment during the relevant period. As to that onus, it should be borne in mind that it is well established that ordinarily difficulties of quantification do not preclude relief where it is accepted that a claimant has suffered actionable loss. A decision-maker faced with a paucity of evidence must do the best that he or she can to assess the extent of a claimant's loss; Harriton v Stephens [2006] HCA 15 at par84.
There was evidence before the Commissioner that in 1960 the worker began his apprenticeship as a toolmaker; that in the course of his work the worker had operated lathes, milling machines, surface and cylindrical grinders, cutter grinders, pantographs, arc welding equipment, and oxy welding and braising equipment; and that over a period of about 44 years prior to his injury, the worker had consistently worked as a toolmaker. The evidence of the worker was to the effect that toolmaking and fitting and turning were engineering trades, the former being a refined aspect of the latter. The evidence of others supported this evidence. Valentin Tanase, a fitter and turner employed by the appellant, detailed all the machines that he used for the purposes of his employment, and said that the worker used the same machines.
Following his injury the worker returned to his employment with the appellant on 11 October 2004 of and remained in that employment until it was terminated on 18 January 2005. During this period, work performed by the worker included tasks suited to a fitter and turner. Jason Davie, an apprentice fitter and turner employed by the appellant, said that of the tasks performed by the worker following his return to work, all but one of them was the task of a fitter and turner. Subsequent to the termination of the worker's employment, he applied for employment in a variety of positions, some of which involved working as a fitter and turner. Bearing in mind the worker's alternative claim to full weekly payments pursuant to s69(4)(c), this acknowledgment that he was able to work as a fitter and turner had the force of evidence against interest.
This evidence is sufficient to demonstrate that the contention that there was no evidence that the worker was capable of working as a tradesman in the engineering industry or that such work was suitable employment for him cannot be sustained. There was sufficient evidence to warrant the challenged findings.
Grounds 5 and 6 fail.
The appeal is allowed in respect of ground 1. Subject to hearing from the parties, I propose ordering that the order as to weekly payments made by the Tribunal on 14 March 2006 be varied by substituting the amount of $16,955.07 for the amount of $19,059.52.
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