Andrew Lloyd Hooley and Comcare
[2014] AATA 6
[2014] AATA 6
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/3820
Re
Andrew Lloyd Hooley
APPLICANT
And
Comcare
RESPONDENT
Decision
Tribunal Deputy President PE Hack SC
Date 9 January 2014 Place Brisbane The respondent’s decision of 3 August 2012 is set aside and the matter is remitted to the respondent for reconsideration in accordance with a direction that the applicant’s normal weekly earnings for the period 1 July 2008 to 31 October 2008 be calculated in a way that includes the payment of an enhanced responsibilities allowance to the applicant.
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Deputy President PE Hack SC
Catchwords
COMPENSATION – normal weekly earnings – whether normal weekly earnings include overtime component – whether normal weekly earnings include enhanced responsibilities allowance component – decision set aside and remitted
Legislation
Safety, Rehabilitation and Compensation Act 1988, ss 8(2), 8(5), 8(10), 19(2)
Cases
John Holland Group Ltd v Robertson (2010) 185 FCR 566
REASONS FOR DECISION
Deputy President PE Hack SC
10 January 2014
Introduction
The applicant, Mr Andrew Hooley, was formerly employed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO). In late 2007 he suffered an injury (using the term in the sense used in s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act)) in the course of that employment. The respondent, Comcare, has accepted liability to pay compensation to Mr Hooley, in accordance with the SRC Act, in respect of that injury. It accepts that it is liable to pay Mr Hooley compensation for incapacity to work during various periods between September 2007 and June 2009.
Where the parties differ is in relation to the amount of the weekly payment – whether the weekly payment should include an additional amount for overtime (the overtime issue) and whether it should include an additional amount representing an enhanced responsibilities allowance (ERA) after 30 June 2008 (the ERA issue). In April 2010 Comcare decided that Mr Hooley's incapacity payments should not include any amounts representing overtime or ERA. The initial decision was varied on reconsideration on 3 August 2012 but in a way that denied Mr Hooley any amount for overtime and, so far as the period after 30 June 2008 was concerned, for ERA.
Mr Hooley contends that his compensation should include amounts representing overtime and ERA and seeks a review of Comcare’s decision of 3 August 2012.
The legislation
By virtue of s 14 of the SRC Act, Comcare is liable to pay compensation to Mr Hooley in accordance with the Act in respect of an injury suffered by him. It is accepted that, as a result of his injury, Mr Hooley was incapacitated for work. Accordingly, s 19 of the SRC Act made Comcare liable to pay him compensation. That section, so far as is presently material, is in the following terms:
(2) Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
where:
AE is the greater of the following amounts:
(a)the amount per week (if any) that the employee is able to earn in suitable employment;
(b)the amount per week (if any) that the employee earns from any employment (including self‑employment) that is undertaken by the employee during that week.
NWE is the amount of the employee’s normal weekly earnings.
It is now necessary to have regard to the complex provisions regarding the calculation of normal weekly earnings in s 8 of the SRC Act. It provides:
(1)For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:
where:
NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RP is the employee’s average hourly ordinary time rate of pay during that period; and
A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
(2)Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula:
where:
NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and
OR is the employee’s average hourly overtime rate of pay during that period.
…
(5)Where, because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.
…
(10)If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:
(a)where the employee continues to be employed by the Commonwealth or a licensed corporation—the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or
(b)where the employee has ceased to be employed by the Commonwealth or a licensed corporation—whichever is the greater of the following amounts:
(i)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury;
(ii)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;
the amount so calculated shall be reduced by the amount of the excess.
The expression “relevant period” is explained in s 9 of the SRC Act in these terms:
(1)For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.
…
Some additional matters of fact
The factual background is uncontroversial. Mr Hooley was a computer specialist who had been employed with the CSIRO for some years. Within the CSIRO’s organisational structure Mr Hooley's classification was CSIRO Officer Level 5 Maximum, usually abbreviated to CSOF5M. The use of the expression “Maximum” indicated that Mr Hooley had reached the highest of the pay scales within that particular level. At least from mid-2006 the organisation was undertaking a project which involved the consolidation of a number of computer servers in various locations across the organisation. It was called the Server Consolidation Foundation Project (the Project). Mr Hooley was seconded to work on the Project in early 2007 although he had been involved with it from much earlier. His position on the Project was described as Technical Lead.
The CSIRO had a policy of paying an ERA to staff requested to take on substantial management responsibilities in addition to, or in substitution for, the responsibilities associated with their usual job. Mr Hooley's responsibilities as Technical Lead in the Project involved such additional responsibilities. In September 2007 he was granted an ERA from 1 July 2007. It had the effect of increasing his level of pay to CSOF6.1, that is, to the first pay scale within the Level 6 classification. In the normal course of events the ERA would have continued to 30 June 2008 however the CSIRO in fact ceased paying the ERA to Mr Hooley in late November 2007 when he requested (because of his ill health) to be taken off the Project.
CSIRO’s policy document regarding ERA makes it clear that they are ordinarily to be regarded as not exceeding 12 months. The pay system was designed in such a way that requests for payment of ERA exceeding 12 months could not be accepted. The policy document read[1]:
Enhanced Responsibilities Allowance is primarily intended to be a short-term measure. The approving officer will need to review any payment of the allowance which might continue for a period longer than 12 months. If such a review is overlooked, payment of the allowance will be discontinued automatically by the pay system.
Similar sentiments appear in the Enterprise Agreement governing the employment of CSIRO officers[2]. Nonetheless I accept that this was a matter of policy and that it was possible, in an appropriate case, for an ERA to continue beyond 12 months.
[1]Page 3 of annexure AR-1 to exhibit 8.
[2] See page 18 of annexure AR-2 to exhibit 8.
The nature of the task that Mr Hooley performed was such that on occasions he was required to work long hours. The Enterprise Agreement[3] specified that officers of Mr Hooley’s classification were not entitled to payment for overtime. Nonetheless Mr Hooley was paid, in fact, for considerable overtime. In the month of June 2007 he worked, and was paid for, 127 hours of overtime. But that changed in the next financial year. Mr Hooley’s supervisor determined that overtime would not be paid and that time off in lieu would be taken[4]. Whilst Mr Hooley received payment for overtime in July and August 2007 that was in respect of hours worked in June 2007; he was not paid for any overtime worked after June 2007.
[3]See page 15 of annexure AR-2 to exhibit 8.
[4]Evidence of Mr Ronald Horst as clarified by document OT7 in exhibit 3.
Mr Hooley first sought treatment for his accepted condition on 13 September 2007. That date, by virtue of s 7(4) of the SRC Act, is taken to be the date on which Mr Hooley sustained his “injury” although he did not have any time off for some time thereafter.
The overtime issue
This issue is quite straightforward. The effect of s 8(2) of the SRC Act is that, where an employee is required to work overtime on a regular basis, the amount of compensation is increased to take into account the amount of overtime actually worked in the “relevant period”, prima facie, but subject to a discretion in s 8(5) of the SRC Act, the fortnight prior to the date on which the injury was sustained. In Mr Hooley’s case that is the fortnight prior to 13 September 2007. Comcare however accepts that, in Mr Hooley’s case, the discretion in s 8(5) ought to be exercised and that a period of six weeks prior to the date of injury ought to be considered as fairly representing the weekly rate at which Mr Hooley was being paid.
Mr Hooley contends that the whole of the time during which he was engaged on the Project, that is, from February 2007 on, should be considered and that that period fairly represents the weekly rate at which he was being paid.
I am unable to accept either contention. What seems to me to be critical is that, whilst Mr Hooley was required to work outside his usual hours, he was not paid overtime in respect of any period after June 2007 as a result of a conscious decision of his supervisor that he would be given time off in lieu instead of being paid overtime. Whether the supervisor was entitled to take that stance seems to me not to matter; the fact remains that Mr Hooley did not work paid overtime in the period of two weeks prior to the deemed commencement of his injury and did not work paid overtime at all in the period in excess of two months prior to that commencement. On that basis I consider that the normal weekly earnings in the two weeks prior to the commencement of the injury do fairly represent the weekly rate at which Mr Hooley was being paid before his injury.
That part of Comcare’s decision was correct. Mr Hooley’s normal weekly earnings ought not contain any additional amount for overtime.
The ERA issue
Consideration of this issue requires consideration of the operation of s 8(10)(a) of the SRC Act. Authoritative guidance on the operation of that subsection has been provided by the decision of the Full Court in John Holland Group Ltd v Robertson[5]. In that case Dowsett J (with whom Spender J agreed) said[6] of s 8(10) of the SRC Act:
Clearly, s 8(10) seeks to limit the compensation payable to an injured employee by reference to his or her notional earnings derived from employment with the same employer had he or she not been injured. Section 8(10)(a) demands a notional enquiry which commences with the employee’s actual current employment. The enquiry is as to his or her earnings in that employment had he or she not been injured. Such enquiry would involve consideration of how, in those circumstances, the employee would have been employed, including consideration of whether he or she would have continued to perform the same duties as were being performed at the time of the accident.
That enquiry in the present case, Mr Hooley contends, leads to the conclusion that he would have continued to receive the ERA beyond the expiry of the original ERA approval on 30 June 2008. Comcare, on the other hand, contends that it was more likely that Mr Hooley would not have been granted a renewed ERA beyond that date.
[5][2010] FCAFC 88; (2010) 185 FCR 566.
[6]At [74].
The issue was the subject of evidence from Mr Hooley, Mr Ronald Horst, his immediate supervisor at the time, and Mr Euan Sangster, the CSIRO’s Executive Manager, Infrastructure at the time. Mr Sangster was on the Steering Committee for the Project.
Mr Hooley’s evidence pointed to the nature of the Project, his earlier and considerable involvement in it, and the great number of ERA’s that had been extended beyond an initial term. These matters, he suggested, led to the conclusion that he was likely to have had his ERA extended had he not been injured. Mr Horst confirmed that Mr Hooley had been a valued and valuable member of the Project team and that he considered it likely that Mr Hooley would have been elevated to CSOF6 level had he not suffered his injury.
Whilst I do not doubt the sincerity of the beliefs of Mr Hooley and Mr Horst I prefer to base my conclusions on the evidence of Mr Sangster. It was his decision to award the ERA to Mr Hooley in the first place. It was he who made staffing decisions once Mr Hooley sustained his injury. He had an expectation that the Project would need a Technical Lead, the role performed by Mr Hooley, until it was closed and transferred to “business as usual”. That transfer had occurred by December 2008. Mr Hooley was initially replaced by an external contractor. That engagement lasted until July 2008. From October 2008, what remained of Mr Hooley’s role on the Project was undertaken by another officer, one already classified at the CSOF6 level. Mr Sangster did not hold any expectation, at the time of approving the ERA in September 2007 (with effect from 1 July 2007) that it would continue beyond the period of 12 months. Moreover he did not hold any expectation that the role of Technical Lead would necessarily remain with Mr Hooley; had another staff member been available at the end of the term of the ERA that other staff member may have been used as Technical Lead. But Mr Sangster does accept the possibility that Mr Hooley might have occupied the Technical Lead role until October 2008 had he not left the Project with the onset of his injury[7]. By that time the role had altered and an employee already classified CSOF6 was undertaking the role of Technical Lead.
[7]Exhibit 12, paragraph 15.
On that basis I consider that the likelihood is that, had Mr Hooley not suffered his injury, he would have continued performing the Technical Lead role until October 2008. And, given that he was highly regarded in that role, I consider the likelihood to be that he would have continued to receive an ERA during that time. I am, though, not satisfied that he would have continued in the role with an ERA thereafter. The evidence of Mr Sangster satisfies me that the nature of the Project had, by that stage, altered sufficiently such that it was no longer likely that Mr Hooley would have occupied the role or been receiving an ERA.
I will give effect to this conclusion by setting aside the decision under review and remitting the matter to Comcare with a direction to include a component for ERA in calculating Mr Hooley’s NWE for the period 1 July 2008 to 31 October 2008. The calculation of Mr Hooley’s NWE set out in the reviewable decision was otherwise correct.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC
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Associate
Dated 9 January 2014
Date(s) of hearing 21 November 2013 Applicant In person Counsel for the Respondent Mr S A McLeod Solicitors for the Respondent Australian Government Solicitor
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