Annabelle Nicolas and Comcare

Case [2014] AATA 189

[2014] AATA 189 

Division GENERAL ADMINISTRATIVE DIVISION

File Number(s)

2013/3160

Re

Annabelle Nicolas

APPLICANT

And

Comcare

RESPONDENT

Decision

Tribunal

Deputy President RP Handley
Date 4 April 2014  
Place Sydney

The Tribunal:

(1) Sets aside the decision under review and remits the matter to the Respondent with a direction that Ms Nicolas’s entitlement to compensation for incapacity for work under s 19 of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) be calculated on the basis of an average working week of 20 hours.

(2) Pursuant to s 67(8) of the SRC Act, orders that the Respondent pay the costs of these proceedings incurred by the Applicant.

........................[sgd]................................................

Deputy President RP Handley

Catchwords

COMPENSATION – normal weekly earnings – normal hours – relevant period – whether because of the shortness of the relevant period it would not fairly represent the applicant’s normal weekly earnings – two years off work before the injury – had only worked for nine days on a graduated return to work program – relevant period would not fairly represent normal weekly earnings – such other period as is considered reasonable – intervening accident unrelated to the Applicant’s employment – normal hours discounted to take into account the impact on capacity to work – normal hours of 20 hours per week – decision set aside and remitted

Legislation

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4(1), 8, 9, 19

Cases

Brady and Comcare [2013] AATA 559
Comcare v Heffernan [2011] FCAFC 131
Comcare v Thompson (2000) 100 FCR 375
Gray v Comcare (2004) 139 FCR 41
Telstra Corporation Limited v Peisley [2006] FCAFC 79
West and Telstra Corporation [2002] AATA 852
Zegura and Comcare (AAT 11555, 13 January 1997 –  oral decision)
Zegura and Comcare [1998] AATA 199

REASONS FOR DECISION

Deputy President RP Handley

  1. Ms Nicolas (the Applicant) has applied to the Tribunal for a review of a decision made by Comcare (the Respondent) to calculate Ms Nicolas’ entitlement to compensation for incapacity for work on the basis of her having worked 12 hours per week.

    BACKGROUND

  2. Ms Nicolas, who was born in 1980, began working full-time for Centrelink in April 2001. On her return to work in January 2008, after the birth of her first child in March 2007, Ms Nicolas commenced part-time work for 30 hours per week. However, she also regularly worked three to four hours overtime per week.

  3. Following a non-work related car accident on 8 December 2008, Ms Nicolas reduced her working hours. Because of injuries from the accident and also pregnancy complications, Ms Nicolas did not work at all in the period 26 February 2009 to 1 May 2011, apart from two days in April 2010, taking a combination of personal and maternity leave. In April 2009, she gave birth to her second child and in May 2009 she had spinal surgery.

  4. On 2 May 2011, Ms Nicolas returned to work on a graduated return to work program. Under the agreed program, Ms Nicolas was expected…

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Details
AGLC
Annabelle Nicolas and Comcare [2014] AATA 189
Case
[2014] AATA 189
Decision Date

CaseChat Overview and Summary

The Applicant, Annabelle Nicolas, has applied to the Tribunal for a review of a decision made by Comcare to calculate her entitlement to compensation for incapacity for work on the basis of her having worked 12 hours per week. The dispute revolves around the appropriate period to be used in calculating Ms Nicolas' 'normal weekly earnings' for the purpose of assessing her entitlement to compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). Comcare accepted liability for Ms Nicolas’s Adjustment Disorder with Mixed Anxiety and Depressed Mood, but calculated her entitlement based on 12 hours per week.

The legal issue before the Tribunal was to determine the correct period to use in calculating Ms Nicolas’s 'normal weekly earnings' under s 19 of the SRC Act. The Tribunal had to consider whether the period prior to the motor vehicle accident on 8 December 2008, or another period, should be used to calculate her normal weekly earnings. The Applicant argued that the period before the accident should be considered, adjusted for the effects of the accident, while Comcare maintained that the period immediately prior to the injury was appropriate.

The Tribunal found that the period immediately prior to the injury was insufficient for calculating Ms Nicolas’s normal weekly earnings. It determined that a reasonable figure would be 20 hours per week, taking into account her pre-accident working hours and the effects of the 2008 accident. The Tribunal considered that this figure provided a fair representation of Ms Nicolas's normal weekly earnings before her injury.

The Tribunal set aside the decision under review and directed Comcare to recalculate Ms Nicolas’s entitlement to compensation for incapacity for work based on an average working week of 20 hours. Additionally, Comcare was ordered to pay the costs of the proceedings incurred by the Applicant.

Orders

Orders of the court

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Background

Background to the litigation

Ms Nicolas (the Applicant) has applied to the Tribunal for a review of a decision made by Comcare (the Respondent) to calculate Ms Nicolas’ entitlement to compensation for incapacity for work on the basis of her having worked 12 hours per week.BACKGROUND Ms Nicolas, who was born in 1980, began working full-time for Centrelink in April 2001. On her return to work in January 2008, after the birth of her first child in March 2007, Ms Nicolas commenced part-time work for 30 hours per week. However, she also regularly worked three to four hours overtime per week. Following a non-work related car accident on 8 December 2008, Ms Nicolas reduced her working hours. Because of injuries from the accident and also pregnancy complications, Ms Nicolas did not work at all in the period 26 February 2009 to 1 May 2011, apart from two days in April 2010, taking a combination of personal and maternity leave. In April 2009, she gave birth to her second child and in May 2009 she had spinal surgery. On 2 May 2011, Ms Nicolas returned to work on a graduated return to work program. Under the agreed program, Ms Nicolas was expected to work 12 hours per week in the first two weeks, with those hours increasing over the following weeks until she was working 22.5 hours per week. In early May 2011, Ms Nicolas’ insurance claim with respect to the car accident in 2008 was yet to be finalised. On 13 May 2011, she received a document from her solicitor that had been sent by Ms Nicolas’ Centrelink Rehabilitation Case Manager to Allianz Insurance providing information about her mental health, and requesting further information from Allianz. This email caused Ms Nicolas considerable anxiety, and she was subsequently diagnosed with Adjustment Disorder with Mixed Anxiety and Depressed Mood. Comcare accepted liability for this condition in its decision of 23 August 2011. At the time of her injury on 13 May 2011, Ms Nicolas was only working 12 hours per week. In subsequent determinations by Comcare, Ms Nicolas’ entitlement to compensation for incapacity for work was calculated on the basis that her normal weekly hours were 12 hours per week. These decisions were affirmed by a review officer in a decision dated 20 May 2013. On 3 July 2013, the Applicant applied to the Tribunal for a review of this decision.LEGISLATION AND ISSUES The issue for the Tribunal is the identification of the period to be used in calculating Ms Nicolas’ ‘normal weekly earnings’ for the purpose of assessing her entitlement to compensation for incapacity for work under s 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act). ‘Normal weekly earnings’ are defined in s 4(1) to mean “the normal weekly earnings of an employee calculated under section 8”. Section 8 of the Act provides relevantly:(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; andA 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. …(4) Where, because of the shortness of the relevant period, it is impracticable to calculate the normal weekly earnings of an employee before an injury under subsection (1) or (2), the normal weekly earnings of the employee before the date of injury shall be taken to be the normal weekly earnings before that date of another employee performing comparable work, being normal weekly earnings from employment by the Commonwealth or a licensed corporation and calculated under subsection (1) or (2), as the case requires.8(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.

Evidence

Evidence Before The Court

During the period 8 December 2008 to May 2011, Ms Nicolas took long periods of personal leave and maternity leave during which she often had no income from her employment. Moreover, when she did work during this time, her earnings were less than those before 2008. The Applicant submits that this enlivens subsection 9(4) of the Act:9(4) If, during any part of the period calculated under the preceding subsections, the employee's earnings were reduced, or the employee did not receive any earnings, because of absence from his or her employment for any reason, that part of that period shall be disregarded for the purposes of calculating the relevant period.Ms Nicolas’s Evidence Ms Nicolas confirmed that the motor vehicle accident which took place on 8 December 2008 and in respect of which her claim for compensation was made against Allianz Australia Insurance Ltd, was settled for the sum of $660,000 inclusive of costs on 24 May 2011. She acknowledged that, in those proceedings, her solicitor submitted on her behalf that, by reason of her injuries, she had lost “at least 50% of her pre accident earning capacity”. Before the accident, she was working on the basis of a permanent part-time work agreement of 30 hours per week plus overtime subject to her family commitments. Ms Nicolas was taken to her return to work agreement with Centrelink signed on 18 April 2011 by which she agreed to work four hours a day on three days a week – a total of 12 hours a week – for the period 2 May 2011 to 20 May 2011. Ms Nicolas said the goal was to gradually increase her working hours to 22.5 hours per week. A second return to work agreement signed on 19 May 2011 allowed for the same hours over the period 21 May 2011 to 2 July 2011. Ms Nicolas was asked why she did not query the number of hours for which she was receiving incapacity payments until nearly two years after the acceptance of her claim. She said she had raised her concern that she should being paid for more than 12 hours per week with her Case Manager at Centrelink, Elizabeth Phillips, on numerous occasions but was told that this could not be taken further. Submissions Ms Fraser, for the Applicant, noted that the injury occurred on 13 May 2011 and that Ms Nicolas returned to work on 2 May 2011, only 11 days before the accident. This did not, therefore, constitute a full period of two weeks before the date of injury, which is the period referred to in s 9(1) of the SRC Act. Ms Fraser submitted that the discretion in s 8(5) should be exercised and the period before the motor vehicle accident on 8 December 2008 should be taken into account as the relevant period for the purpose of calculating Ms Nicolas’s normal weekly earnings. However, the Applicant accepts that the 30 hours a week she was working at that time, plus overtime averaging 3.3 hours per week, should be discounted to take into account the effects of the motor vehicle accident. Ms Fraser submitted that the goal of 22.5 hours per week adopted as the goal of Ms Nicolas’s return to work program with Centrelink plus 2.5 hours overtime, a total of 25 hours per week – equivalent to a discount of 25% on the hours worked before the motor vehicle accident - was consistent with the terms of the settlement of her claim for that accident.

Decision

Reasons for decision

On this basis, doing the best I can in the absence of any reliable evidence as to her capacity to work after the 2008 injury, and using the 30 hours per week Ms Nicolas last worked in the weeks before the motor vehicle accident as a baseline for her pre-injury hours and, discounting this to allow for her reduced earning capacity as a result of the motor vehicle accident, a figure of 20 hours per week would be reasonable for the purpose of fairly representing her normal weekly earnings before the injury. I have selected this figure on the basis that it represents four hours a day on five days or week or, alternatively, five hours a day on four days a week. This takes into account that, in the period 2 May to 13 May 2011, Ms Nicolas apparently had the capacity to work four hours a day on three days a week.Decision The Tribunal: (1) Sets aside the decision under review and remits the matter to the Respondent with a direction that Ms Nicolas’s entitlement to compensation for incapacity for work under s 19 of the SRC Act be calculated on the basis of an average working week of 20 hours.(2) Pursuant to s 67(8) of the SRC Act, orders that the Respondent pay the costs of these proceedings incurred by the Applicant.

Ratio Decidendi

Legal Principle Established

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