Australian National Railways Commission v Commission for the Safety Rehabilitation & Compensation of Commonwealth Employees

Re: AUSTRALIAN NATIONAL RAILWAYS COMMISSION
And: COMMISSION FOR THE SAFETY REHABILITATION AND COMPENSATION OF COMMONWEALTH
EMPLOYEES and PETER HOPPO
No. S G69 of 1991
FED No. 161
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Von Doussa J.(1)

CATCHWORDS

Administrative Law - Compensation - employee suffering partial incapacity for work after resigning from employment - employee working elsewhere for a time - obligation of employer to provide suitable work - whether employee able to revive mutuality of employment relationship - whether employer on notice that the employee was suffering partial incapacity - purpose of the applied provision of s.67 of the Workers Compensation Act 1971 (SA)

Compensation (Commonwealth Government Employees) Act 1971 (Cth) Australian National Railways Commission Act 1983 (Cth), s.47 Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), ss.67, 139

Industrial Relations Amendment Act 1991 (Cth), s.8

Workers Compensation Act 1971 (SA), ss.51, 67, 86

Workers' Compensation Act 1926 (NSW) s.11(2)

Behan v Australian Telecommunications Corporation (1990) 12 AAR 466

Hartwell v Electricity Trust of South Australia (1982) 29 SASR 365

Kelvinator v Jezior (1988) 49 SASR 592

R.J. Brodie (Holdings) Pty Limited v Pennell (1968) 117 CLR 665

Electric Power Transmission Pty Limited v D'Urso (1970) 124 CLR 338

Asciak v Australian Glass Manufacturers Pty Limited (1964) 64 SR(NSW) 344

Mitsubishi Motors Australia Ltd v Mitchell (1989) 152 LSJS 81

ROH Industries Pty Ltd. v Trepic (1989) 52 SASR 158

Dowell Australia Limited v Archdeacon (1975) 132 CLR 417

Australian Gas Light Company v Steele (1963) 36 ALJR 336

General Motors-Holden Limited v D'Andrea (1985) 122 LSJS 301

Hardaker v Wright and Bruce Pty Ltd (1961) 78 WN NSW 941

Re Reserve Bank of Australia and COMCARE and Anor (1990) 12 AAR 160

HEARING

ADELAIDE

#DATE 26:3:1992

Counsel for the appellant: Mr K R McCarthy QC with Mr J F Costello

Solicitor for the appellant: Australian Government Solicitor

Counsel for the 1st respondent: Mr S V Cullimore

Solicitors for the 1st respondent: Australian Government Solicitor

Counsel for the 2nd respondent: Mr S C Cole

Solicitors for the 2nd respondent: Johnston Withers

ORDER

The appeal be dismissed.

The applicant pay the second respondent's costs to be taxed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal from a decision of the Administrative Appeals Tribunal constituted by Deputy President Burns affirming two decisions by a delegate of the Commission for Safety Rehabilitation and Compensation of Commonwealth Employees ("COMCARE") which determined that the applicant ("ANRC") was liable to pay compensation to the second respondent ("Mr Hoppo"), subject to a variation of the date when compensation payments were to commence.

The appeal raises two questions; the first is whether in all the circumstances of the case partial incapacity for work suffered by Mr Hoppo should be treated as total incapacity for work, and if so, secondly, the date when notional total incapacity for work commenced.
Upon the oral and documentary evidence led on the review of the two decisions, the Tribunal made a number of findings of fact which the parties have not sought to challenge in this Court. Mr Hoppo was born on 20 June 1945. He left school at the age of fourteen. He joined the South Australian Railways in 1967 as a labourer. In 1969 he transferred to the Commonwealth Railways but left this employment in the early 1970's. In July 1975 he went back to work for the South Australian Railways, working in the bogey exchange at Peterborough. In March 1978 the South Australian Railways was transferred to the ANRC. This resulted in a transfer of Mr Hoppo's employment to ANRC.
On 19 January 1984 Mr Hoppo was employed as a ganger class 2. That day he suffered an injury when he was struck on the back of the head by a vehicle door. He spent a short time in hospital and was away from work for several weeks. As a result of the injury he suffered permanent partial incapacity for work caused by an injury to his neck. The permanent effects of the injury are headaches and muscle spasm which limit his capacity for work to light duties only, and make bending, lifting, and looking upwards, undesirable activities.
On 3 July 1984 Mr Hoppo suffered a further injury whilst working as a ganger replacing sleepers. He was struck on the knee and thigh by a falling sleeper. The blow caused injury to the under-surface of his kneecap and permanent partial incapacity for work. The knee injury renders him unfit for normal work as a ganger as he is unsuited for work that requires kneeling, crouching or climbing.
In 1985 Mr Hoppo received medical advice that because of his injuries he should no longer work as a ganger, but should seek light duties with ANRC. Mr Hoppo applied for and was accepted into a position of crane driver at the ANRC bogey exchange at Dry Creek. When he applied for this job he did not bring his disabilities to the attention of ANRC. He commenced work as a crane driver on 8 July 1985. The Tribunal accepted Mr Hoppo's evidence that he did not apply for light duties as he believed that he would be disadvantaged by doing so.
Mr Hoppo continued working as a crane driver until he resigned from that position on 12 August 1986. The Tribunal accepted his evidence that he suffered "some inconvenience" whilst working as a crane driver because of the need to remain seated in a small compartment and because of the jerking movements of the crane, but found that he could perform this work without undue difficulty. The Tribunal held that Mr Hoppo's resignation was not influenced in any way by physical discomfort suffered whilst performing work as a crane driver.
At the time of his resignation Mr Hoppo informed ANRC that he was leaving to take up another job at Wangaratta. However, the Tribunal found that although this explanation was given, Mr Hoppo did not intend to take up such employment, rather he had voluntarily chosen to "drop out" of the work force for a time. When he resigned, his marriage was breaking down, he had problems with his teenage sons, he was in the process of recovering from alcoholism, and he was having difficulty relating to his work mates in a work environment that he found to be less than supportive. The Tribunal found that at the date of Mr Hoppo's resignation he was partially incapacitated for work by the two injuries previously suffered in the course of his employment but that these injuries were not the reason for his resignation.
After a little more than a year off work Mr Hoppo sought and obtained employment as a storeman/forklift driver with General Motors-Holden Australia Limited ("GMH"). He commenced that employment on 27 October 1987. He found that driving a forklift caused him considerable pain. On 12 April 1988 he consulted a doctor at the GMH plant who sent him home. He did not return to work and on 14 June 1988 was dismissed for absenteeism. The Tribunal found that Mr Hoppo was not capable of performing the duties of a storeman/forklift driver with GMH as a result of the two injuries he had suffered whilst working for ANRC.
By letter dated 8 June 1988 Mr Hoppo, through his solicitors, informed ANRC that he wished to return to employment with ANRC, and that he was ready, willing and able to perform light work suitable to his diminished capacity for work having regard to his neck and right knee injuries. Following that request correspondence occurred between COMCARE and Mr Hoppo's solicitors but no offer of work was made. Significantly, on 14 June 1988, and again on 29 June 1988, Mr Hoppo was examined by his general medical practitioner who issued workers' compensation medical certificates certifying that he was suffering an exacerbation of the neck injury suffered on 19 January 1984 and was unfit for work from 12 May 1988 to 28 July 1988. On 10 November 1988 Mr Hoppo wrote to his Union seeking its assistance in obtaining his re-employment in suitable light work by ANRC, and the Union forwarded that correspondence to ANRC on 14 November 1988 with a request that the matter be reviewed.
The two injuries which resulted in partial incapacity for work occurred during the operation of the Compensation (Commonwealth Government Employees) Act 1971. Although that Act was repealed by the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), s.139, under the transitional provisions in Part X of that Act, the rights and liabilities of Mr Hoppo and ANRC are to be ascertained according to the 1971 Act: Behan v Australian Telecommunications Corporation (1990) 12 AAR 466. Under the 1971 Act, Mr Hoppo, as an employee transferred from the South Australian Railways to ANRC was entitled to elect to have his claims for compensation dealt with under that Act as modified by s.47 of the Australian National Railways Commission Act 1983 (Cth). Mr Hoppo had so elected. Under the modifying provisions, in substitution for Part III of the 1971 Act, Parts II, IV and VIII of the South Australian Workers Compensation Act 1971, applied, and in particular s.67 of that Act.
Section 51 of the South Australian Act provides for the calculation of weekly compensation where incapacity for work results from injury arising out of or in the course of the employment. Section 67 provides:

"For the purposes of determining the amount of weekly payments provided for by section 51, partial incapacity for work shall be treated as total incapacity for work except -

(a) during any period in respect of which the employer proves that work for which the worker was fit was made available to the worker by the employer. or

(b) during any period in respect of which the employer proves -

(i) that it was not reasonably practicable for the employer to make available to the worker work for which the worker was fit;

and

(ii) that such work was reasonably available to the worker elsewhere."

The two decisions by delegates of COMCARE had determined that Mr Hoppo was entitled to have his partial incapacity resulting from his two work injuries treated as total incapacity from 14 November 1988. Upon the facts as found by the Tribunal, the Tribunal varied the decisions under review by substituting 26 September 1988 as the commencement date in lieu of 14 November 1988 but otherwise affirmed the decisions.
The Tribunal's reasons for substituting the earlier date were as follows: the letter of 8 June 1988 was the first notification received by ANRC that Mr Hoppo asserted that he was suffering partial incapacity for work, that he was ready, willing and able to undertake work for which he was fit, and that he sought to avail himself of the obligation which s.67 imposed on his former employer. However, at that time, as the medical certificates issued by Dr Gilchrist indicated, whilst Mr Hoppo may have been ready and willing to do suitable work, he was not able to do so in a medical sense. Medical evidence before the Tribunal (in particular a medical report from Dr Gilchrist, exhibit T94) satisfied the Tribunal that by 26 September 1988 Mr Hoppo had sufficiently recovered from the symptoms which earlier in 1988 had rendered him totally unfit for work, to be able to undertake light work, so that by 26 September 1988 he was ready, willing and able to undertake suitable work if it were offered by ANRC.
ANRC challenges the decision of the Tribunal both as to its conclusion that Mr Hoppo was entitled to the benefit of s.67, and as to the commencement date for weekly compensation at total incapacity rates. The first respondent, COMCARE, has made a written submission supporting the argument by counsel for ANRC that if s.67 applied, the correct commencement date for total incapacity payments pursuant to s.67 was 14 November 1988, but otherwise has taken no part in the appeal.
There are a number of decisions of the Full Court of the Supreme Court of South Australia which have considered the construction of s.67. Whilst there are differences in language between s.67 and sub-s.11(2) of the Workers' Compensation Act 1926 (NSW) which makes provision for partial incapacity to be deemed to be total incapacity in certain circumstances, the Full Court has held that the underlying concept in the two sections is the same: Hartwell v Electricity Trust of South Australia (1982) 29 SASR 365 at 369 and Kelvinator v Jezior (1988) 49 SASR 592 at 596. The principles stated in the leading case of R.J. Brodie (Holdings) Pty Limited v Pennell (1968) 117 CLR 665, and other decisions of the High Court of Australia on the New South Wales legislation have been applied to s.67.
In R.J. Brodie (Holdings) Pty Limited v Pennell (supra) the employer argued that sub-s.11(2) of the New South Wales legislation did not apply in the case of a partially incapacitated worker who was engaged in a business undertaking from which he derived a small profit. Sub-section 11(2) required an employer to provide suitable employment for his injured worker during the worker's partial incapacity for work, and upon any failure to do so the worker's incapacity was deemed to be total. In considering the operation of the sub-section in their joint judgment Kitto, Taylor, Windeyer and Owen JJ. said pp 669-670:

"A clue to the true solution may, perhaps, be found in the somewhat loose language of the sub-section itself for the 'provision' of suitable employment involves an element of mutuality. Employment is not a commodity which can be provided merely by an offer; it can in strictness be provided only by the employer and employee entering into and performing their obligation under a contract of service and this involves the co-operation of both employer and employee. There can, of course, be no 'failure' on the part of an employer to provide suitable employment if the employee refuses, and continues to refuse, to enter his employment, or, if the facts show that the employee's conduct is inconsistent with the necessary degree of co-operation on his part. Such would be the case where the employee has undertaken full-time employment with another employer so long as such employment continues, or, where the employee moves his residence to a place so remote from the employer's place of business as to be quite incompatible with employment by that employer. Likewise, it would seem, the position would be the same where after his partially incapacitating injury the worker suffers further injuries or sickness resulting in total incapacity for any form of work. It must be remembered that not only is the obligation to provide suitable employment a continuing one but there must also be a continuing failure to provide suitable employment in order to entitle a worker to continuing benefits pursuant to s.11(2) and, in our view, there cannot be a continuing failure where the circumstances are such that it can be seen that throughout any relevant period the employee is not ready, willing or able to enter the employ of the pre-injury employer.

Whether or not there has been any such failure in relation to any period during the continuance of the partial incapacity is, of course, a question of fact to be determined in the light of all the circumstances including the situation of the worker."

The other member of the Court, Menzies J., stated his conclusion more shortly. He said, at p 671:

"The provision of employment imports, of course, mutuality between the employer and the worker and it is not difficult to see that where it is the worker who is responsible for a lack of mutuality there is no failure on the part of the employer to provide employment." The High Court held that very minor activities in which Pennell engaged were not such as to preclude him from asserting that he was during the period in question ready, willing and able to enter into suitable employment with his former employer.

The decision in R.J. Brodie (Holdings) Pty Limited v Pennell (supra) was applied in Electric Power Transmission Pty Limited v D'Urso (1970) 124 CLR 338 where it was held that the refusal of an employer to employ a partially incapacitated worker did not amount to a failure to provide suitable employment within the meaning of sub-s.11(2) where the worker was unwilling to accept suitable employment notwithstanding that the employer was unaware of the worker's unwillingness. Barwick C.J., Menzies, Windeyer and Owen JJ. referring to Pennell's case said at p 341:

"It was pointed out there that employment involved mutuality between the employer and the worker and that if a worker did not want to work, an employer could not be said to have failed to provide him with employment."

Their Honours referred with apparent approval to a statement by Sugerman J. in Asciak v Australian Glass Manufacturers Pty Limited (1964) 64 SR(NSW) 344 at 351 where his Honour said:

"Section 11(2) necessarily imports a readiness and willingness on the part of the worker both to accept suitable employment when offered and, if it is undertaken, to continue in it and conform to its duties and obligations. It cannot be said that there has been a failure on the employer's part where it appears that he has not offered employment to, or continued in his employment, a worker as to whom it is found that he was not so ready and willing. Moreover, the circumstances that suitable employment is not forthcoming the instant that it is asked for is not necessarily a 'failure' to provide it within the meaning of the subsection. Before it can be said that there has been a 'failure' on the employer's part a reasonable opportunity may have to be accorded him to find or create a job which is 'suitable' having regard to the extent and nature of the worker's incapacity."

In Dowell Australia Limited v Archdeacon (1975) 132 CLR 417 the Court held that R.J. Brodie (Holdings) Pty Limited v Pennell (supra) and Electric Power Transmission Pty Limited v D'Urso (supra) had given to the words of sub-s.11(2) an authoritative interpretation. The members of the Court were divided on whether the evidence established as a matter of fact that a partially incapacitated worker who had been retrenched, and who had moved his home to a distant part of the State, remained ready, willing and able to take up suitable employment in Sydney.
The decisions of the High Court were applied to s.67 of the South Australian legislation in Hartwell v Electricity Trust of South Australia (supra). The Full Court held that neither paragraph of s.67 had application to a partially incapacitated worker who became totally incapacitated by a heart attack unrelated to his employment, as the worker was then unable to engage in any work.
In General Motors-Holden Limited v D'Andrea (1985) 122 LSJS 301 the Full Court of South Australia considered the application of s.67 to worker who decided to accept an offer by the employer to its employees generally of early retirement, with a special retirement allowance. The worker, at the time that he accepted early retirement under the scheme, was partially incapacitated and he was working on light duties. Under he scheme the worker resigned and received superannuation benefits and $4,446 retirement benefits. After retirement he unsuccessfully sought other work and then went on to an invalid pension. Some two and a half years later he notified his former employer that he was ready, willing and able to undertake suitable work, and also claimed weekly compensation. The Court held that the worker, by accepting the early retirement and financial benefits that went with it, had thereby intimated to his employer that he was withdrawing from the work force and was no longer available for work. The worker brought to an end the mutuality upon which the obligations under s.67 depended. Jacobs and O'Loughlin JJ. were of the opinion that the worker was estopped thereafter from asserting that he was ready, willing and able to work, even if he sought to return the employer to its former position by repaying the early retirement benefit. On the other hand, King C.J. considered that the worker was estopped from denying that he was ready, willing and able to work only until such time as he restored the employer to its original position.

In Mitsubishi Motors Australia Ltd v Mitchell (1989) 152 LSJS 81 a worker had suffered a back injury, and on his return to work after an absence of about one month, he was dismissed on the ground that he had failed to disclose earlier injuries in his application for employment.Over the following eighteen months the worker was either on sickness benefits or in casual employment in which he continued to suffer from his back injury. He then obtained full-time employment, but after six months resigned that employment and moved to a country town in an endeavour to become reconciled with his estranged wife. On being unable to obtain suitable work in that town he claimed workers' compensation and sought the benefit of s.67. The Industrial Court of South Australia upheld his claim. In the Full Court, an appeal by the employer was allowed by a majority. Jacobs A.C.J., with whom Mohr J. agreed, said at p 84:

"The respondent was clearly not entitled to have his partial incapacity treated as deemed total incapacity so long as he remained in full time employment which he was able to undertake. In my opinion he cannot change that position to his own advantage and the disadvantage of his pre-injury employer by the simple device - and I do not by the use of that word imply any censorious criticism of employment for purely personal reasons, unrelated to his injury or his capacity to continue in full-time employment. To allow him to do so is to ignore the fundamental principle which underlies the statutory obligation of the employer which s.67 creates. As King C.J. said in Hartwell v ETSA (supra) 'notional total incapacity arises only if and while the worker is ready willing and able to perform work which he is not prevented from doing by the compensable injury...If a worker is unable to perform work which is available, not because of incapacity caused by the compensable injury, but because of incapacity caused by other factors, the section cannot operate to give rise to notional total incapacity.' That is the broad principle derived from the cases, and it ought not in my judgment to be restricted by the gloss placed upon it in the majority decision of the Full Industrial Court to give the respondent the benefit of s.67. He was (sic) injury or partial incapacity."

The other member of the Court, Duggan J., considered that s.67 had properly been applied by the Industrial Court as the trial judge had found that the worker's back injury was deteriorating and would have led to him giving up the employment from which he resigned sooner or later, and that his back condition was one of the reasons why he resigned. It was not suggested in the judgments that the fact that he had been dismissed from his employment prevented the revival of the element of mutuality.

In ROH Industries Pty Ltd. v Trepic (1989) 52 SASR 158 it was held that an employer's obligation under s.67 came into existence only if, and when, the employer is aware or ought to be aware that the worker is, or at least might be, partially incapacitated. And finally, in Kelvinator v Jezior (supra) the Full Court of South Australia applied the same principles to a provision in the Workers Rehabilitation and Compensation Act 1986 (SA), sub-s.35(2), which provided that a partial incapacity for work over a particular period should be treated as a total incapacity for work over that period unless the Workers Rehabilitation and Compensation Corporation establishes that suitable employment for which the worker is fit is reasonably available. A worker, who had been dismissed for misconduct, claimed the benefit of the provision for the month following his dismissal in respect of partial incapacity for work during that period caused by an injury suffered before his dismissal. The Court held that the worker, by his behaviour and attitude which had led to his dismissal, had disqualified himself from carrying out available by the employer. Accordingly, sub-s.35(2) had no application. It is important however to note that Cox J., in delivering the judgment of the Court, said, at p 598:

"As the authorities emphasise,...it is a question of fact, and perhaps degree, in every case whether there has been a fundamental breach of the condition that underlies section

35. Obviously a mere temporary disagreement or other passing episode will not ordinarily constitute this kind of disqualification. The question has to be judged in relation to the time for which the weekly compensation is sought."

Later at p 599, Cox J. continued:

"Certainly a want of mutuality at one particular time will not necessarily foreclose that question forever: see, for example Kanoon v Cablemakers of Australia Pty Ltd

(1976) WCR (NSW) 328. However, the period of partial incapacity with which the Tribunal was concerned here extended only for a month or so beyond the dismissal. It could not possibly be said that the employer was, in effect, obliged to take the respondent back in that time."

R.J. Brodie (Holdings) Pty Limited v Pennell (supra) established that the obligation imposed on the employer to provide suitable employment under sub-s.11(2) was a continuing one. Although the obligations imposed on the employer under s.67, if partial incapacity is not to be treated as total incapacity, are differently expressed, the language of s.67 also indicates that the obligations are continuing ones. The obligations commence when the employer has the requisite knowledge that the worker is or might be suffering partial incapacity for work (ROH Industries Pty Ltd v Trepic (supra)) and continue for so long as the worker remains partially incapacitated and the requisite element of mutuality is present.
The authorities emphasise that it is a question of fact and perhaps degree whether the element of mutuality is present to be determined in light of all the circumstances including the situation of the worker. If at a particular time the element of mutuality is not present, it does not follow that the worker's rights under s.67 are forever extinguished. The worker's rights can be revived upon the worker becoming ready, willing and able to perform work for which he or she is fitted. An example is given in the joint judgment of Kitto, Taylor, Windeyer and Owen JJ. in R.J. Brodie (Holdings) Pty Limited v Pennell (supra) of a partially incapacitated worker who undertakes full-time employment with another employer. Their Honours observed in the passage cited above that the relevant mutuality in such a case would not be present for "so long as such employment continues". In Dowell Australia Limited v Archdeacon (supra) the award of the Workmen's Compensation Commission which was upheld by the High Court provided for compensation assessed under sub-s.11(2) for the period 1 July 1972 to 15 December 1977, and then again from 18 January 1973. During the period 16 December 1972 to 18 January 1973 the element of mutuality was not present because the worker had travelled away from Sydney leaving no forwarding address. On 18 January 1973 when his address became known to the employer, the element of mutuality returned. It was not suggested by the High Court that the Commission erred in holding that the element of mutuality could be revived after a period when mutuality did not exist. It is also implicit in the examples of situations where the element of mutuality would not exist, given by the High Court in Electric Power Transmission Pty Limited v D'Urso (supra) at p 342 namely of a worker who is in hospital or in prison or who has gone away so that he cannot be employed, that upon the worker leaving hospital, being released from prison, or returning so that he could be employed, the element of mutuality would revive. See also Kelvinator v Jezior (supra) at pp 598, 599.
Mere resignation by a worker from the employment with the employer does not preclude the worker from the benefit of s.67, at least where the resignation is not pursuant to a compulsory retirement obligation imposed by law: Australian Gas Light Company v Steele (1963) 36 ALJR 336. In General Motors-Holden Limited v D'Andrea King C.J. at p 307 said:

"The early retirement agreement could not operate to deprive the respondent of his rights under the Workers Compensation Act or to limit those rights (section 86). If at any subsequent time, the conditions for the application of section 67 were fulfilled, it would operate to convert the partial incapacity into notional total incapacity."

Whilst Jacobs J. held that the acceptance of the benefits of the retirement scheme thenceforth prevented the worker from fulfilling the conditions of s.67, he drew a clear distinction at p 309 between a resignation under the early retirement scheme and the termination of the contract of employment in other circumstances.

Section 86 of the Workers Compensation Act 1971 (to which King C.J. referred) provides that the Act shall apply notwithstanding any contract to the contrary. Section 86 is not one of the provisions of the South Australian Act which is applied by s.47 of the Australian National Railways Commission Act. Nevertheless under the Compensation (Commonwealth Government Employees) Act, as modified, it is not open to the parties to contract out of the provisions of s.67 which have been enacted as a matter of public policy for the benefit of partially incapacitated workers: Dowell Australia Limited v Archdeacon (supra) at p 425 and Behan v Australian Telecommunications Corporation (supra) at 75.
Before the Tribunal, ANCR contended that it should be held that Mr Hoppo had exhausted his right to compensation under s.67 because the requisite relationship out of which the element of mutuality must arise had been destroyed. It was submitted that a number of factors in combination led to this position: Mr Hoppo in July 1985 selected his own job, and did not disclose his disability and ask ANRC to find suitable work; then he resigned and misrepresented his reasons for leaving so that the employer remained ignorant of the fact that Mr Hoppo continued to suffer partial incapacity; fourteen months later when he felt ready for work, instead of approaching ANRC, he obtained employment with another employer; it was not until almost two years after leaving ANRC that he disclosed his partial incapacity and sought suitable work.
The Tribunal rejected this contention. The Tribunal said at para 36 of its reasons for decision, after reviewing the authorities:

"Employers are only liable for compensation for those incapacities which arise out of the employment relationship (see Hartwell v Electricity Trust of S.A. supra). However, it is only in situations where the worker can be said to have made it impossible to revive the mutuality necessary for a renewed employment relationship that the worker is not entitled to succeed where the partial incapacity is attributable to that relationship."

Before this Court counsel for ANRC contended that the Tribunal in this passage adopted a test which was too strict and imposed an unnecessarily harsh burden on the employer. It was argued that the proper test for determining whether the employment relationship has been irrevocably brought to an end is that enunciated in Hardaker v Wright and Bruce Pty Ltd (1961) 78 WN NSW 941 at 944 in a passage from the joint judgment of Owen and Walsh JJ. which reads:

"The matter must depend upon a consideration of the facts relating to the prior fulfilment of the obligation, and of those relating to the circumstances which have led to the subsequent allegation that there is a failure to fulfil it."

In the context in which it appears, it is clear that this passage is an observation upon the unusual facts of the case and was not intended to be a statement of principle. This is apparent from the very next sentence of the judgment which reads:

"The present case does not seem to be one in which it is either necessary or practicable to examine or decide what are the circumstances in which it may be said the employer's obligation is 'exhausted', meaning thereby that he can no longer be called upon to fulfil it subsequently by providing suitable employment".

Moreover, the decision precedes the authorities on sub-s.11(2) and s.67 to which reference has already been made.

In my opinion the Tribunal did not fall into error of law in its approach to s.67, or in the conclusion which it reached. At para 26 of its reasons for decision the Tribunal said:

"The issue in this case is whether the worker was ready, willing and able to undertake any employment (ANRC) may have offered which he was fit to do".

That passage correctly stated the issue of fact which the Tribunal had to decide. The later passage in para36 which is attacked must be understood in the context of the argument that Mr Hoppo had by his conduct destroyed the element of mutuality. As a rejection of that argument I consider the impugned passage does not reflect error.
In considering the contention of ANRC that the combination of the several factors on which it relies destroyed the element of mutuality it is helpful to look separately at those factors. That Mr Hoppo in July 1985 sought out a job which he considered he could perform within ANRC without reporting that he was no longer fit to work as a ganger is not conduct inimical to the ongoing relationship of employer and employee. His resignation for personal and domestic reasons in August 1986 does not indicate any breakdown in the relationship between ANRC and Mr Hoppo which would impede the later resumption of that relationship. It is true that Mr Hoppo gave a reason for leaving his employment which was not true but it is difficult to see that this misstatement was of any consequence. Mr Hoppo was not leaving his employment because of disability resulting from his two work injuries. The Tribunal has found that at the time Mr Hoppo was in a confused state of mind. His statement was not one made with the intention that ANRC would act on it to its detriment, or to the advantage of Mr Hoppo. For the period of almost two years before Mr Hoppo notified ANRC of his alleged partial incapacity he has not claimed compensation. When these factors are considered in combination there is nothing about them which suggests any reason why the parties could not resume an employer and employee relationship and co-operate together if ANRC had suitable work which it could make available to Mr Hoppo.
The gravamen of the complaint by ANRC seems to be that it should not be required to meet the obligations of s.67 some two years after Mr Hoppo resigned when it did not know in the meantime that he had a potential claim for compensation. But the length of the interval of time between the termination of the contract of employment and the claim for the benefit of the deeming provision has not been suggested in any of the authorities as a matter which may prevent the element of mutuality being present. The purpose of the provision would not be served if this were so. There is no time limit under the Act beyond which incapacity resulting from a compensable disease or injury does not attract benefits. Incapacity may not result from an injury or disease for years, perhaps for many years after the relationship of employer and employee has ceased.
When incapacity occurs, the employee is entitled to the benefits provided by the Act whatever the interval of time between the happening of the injury or disease and the onset of incapacity.
Part IV of the Workers Compensation Act 1971 in which s.67 appears is headed "Amount of Compensation". It is one of several provisions concerned with the assessment of the amount of compensation. The evident intent of the section is to put the onus on the employer either to provide work or to show that work with another employer is available for a partially incapacitated worker who is ready, willing and able to work, failing which compensation will be assessed as if the incapacity is total. For that part of the scheme of the legislation to be implemented, it is necessary that the section be applied regardless of the time when the partial incapacity arises.
If a worker who has suffered injury or disease arising out of or in the course of the worker's employment with the employer seeks the benefit of s.67 a long time after the contract of service with that employer has come to an end, it is understandable that circumstances may have so changed in the meantime that the former employer will be unable to provide suitable work. The section recognises this; if it is not reasonably practicable for the employer to make available to the worker work for which the worker is fit, it is open to the employer to prove that such work is reasonably available to the worker elsewhere: para67(b). If the employer cannot discharge the onus of proof, then the worker is entitled to have compensation assessed on the basis of notional total incapacity. When s.67 is recognised as a provision concerned with the assessment of the rate of compensation, the importance of the requirement that the worker throughout the period during which compensation is to be assessed be ready, willing and able to undertake suitable work can be readily understood. If a partially incapacitated worker is in fact ready, willing and able to work during the period when the benefit of para67(a) is claimed, it will, generally speaking, only be in cases where the worker by his conduct has made it impossible to revive the element of mutuality between the employer and the worker that the provision will not apply. There may be exceptional cases where the element of mutuality cannot be revived due to a factor other than the conduct of the worker, e.g. a legal prohibition such as a compulsory retiring age (cf. Australian Gas Light Co. v Steele (supra)), but this is not the exceptional case.
This case is readily distinguishable from Mitsubishi Motors Australia Ltd v Mitchell (supra) where the worker voluntarily gave up employment with a third party which, on the view of the majority, he was capable of performing. Here the work which Mr Hoppo had with GMH was, on the finding of the Tribunal, work that he was not capable of performing as the result of the two injuries which he had sustained whilst working for ANRC.
Sub-section 11(2) of the New South Wales legislation considered in R.J. Brodie (Holdings) Pty Limited v Pennell (supra), Electric Power Transmission Pty Limited v D'Urso (supra) and Dowell Australia Limited v Archdeacon (supra) imposed an obligation on the employer to provide suitable employment. There is a similarity in concept between that obligation and the one which arises under para 67(a). Paragraph 67(b) provides an avenue for the employer to avoid a finding of notional total incapacity which was not present in sub-s.11(2). Under para 67(b) work will only be reasonably available to the worker elsewhere if the worker is ready, willing and able to enter into and perform the obligations of a worker under a contract of service with another employer who is prepared to enter into a contract of service with the worker. An element of mutuality must be possible to establish the relationship of employer and employee which para67(b) contemplates. If the worker is unable to fulfil that requirement, for example because of total incapacity which has arisen from a condition unrelated to the work injury, as in Hartwell v Electricity Trust of South Australia (supra), neither limb of s.67 will have application. Similarly, if a worker represents to the employer that he or she is retiring from the work force and will not be available for work, and accepts a benefit from the employer based on that representation, neither limb of s.67 will apply: General Motors-Holden Limited v D'Andrea (supra). However, a case may arise where under para 67(a) the element of mutuality may not be possible because the relationship between the employer and employee has so broken down that at least during the period under consideration, it cannot be revived. Yet if the worker is ready, willing and able to perform work for which the worker is fit, it may be that para67(b) will have application. The breakdown of the relationship between former employer and the worker may lead to a finding that it was not reasonably practicable for the employer to make available to the worker work for which the worker was fit. The question would then arise whether such work was reasonably available to the worker elsewhere. If the employer could not prove that it was, then it is arguable that under para67(b) the partial incapacity should be treated as total. This question has not been decided in the cases considered under s.67 by the Full Court of South Australia, and it was not argued in the present case. It is however a question that would require consideration if it were not the case that Mr Hoppo is entitled to have his partial incapacity treated as total incapacity under para67(a).

The second ground of challenge to the decision of the Tribunal concerns the date from which notional total incapacity under s.67(a) should commence. The contention of ANRC is that the worker's letter of 8 June 1988 was not a "valid notification" of partial incapacity as Mr Hoppo was not at the time able to perform suitable work - he was according to the medical certificates he provided totally incapacitated for work in the ordinary sense of that concept. Furthermore, on 8 June 1988 his contract of employment with GMH was still on foot. It was not until the Union's correspondence of 14 November 1988 that ANRC received notification that Mr Hoppo was ready, willing and able to perform suitable light work, and that he was in fact ready, willing and able to do so. Although in ROH Industries Pty Ltd v Trepic (supra) it was held that s.67 comes into existence only if, and when, the employer is aware or ought to be aware that the worker is, or at least may be, partially incapacitated, the decision does not go so far as to support the contention of ANRC. It is to be noted that King C.J. at p 162 observed:

"There is an absurdity about the notion of an employer being under an obligation to provide work for a partially incapacitated worker although he is not aware and could not reasonably become aware that the occasion for the performance of the obligation has arisen at least where his ignorance is brought about by the failure of the worker to acquaint him with the fact that the occasion has arisen." (Emphasis added)

In Electric Power Transmission Pty Limited v D'Urso (supra) Barwick, Menzies, Windeyer and Owen JJ., speaking of sub-s.11(2) said, at p 341:

"This subsection does require an employer to provide his partially incapacitated worker with suitable employment and states the consequence of his failure to do so. It does not require as a condition of its operation that the worker should ask for work and it does not afford the employer any excuse for failing to provide such work."

In Dowell Australia Limited v Archdeacon (supra) the Worker's Compensation Commission had said:

"I do not think the worker has to keep pestering the employer constantly about a job when the employer was the one who removed the suitable work from the worker. I think they had an obligation to chase him up from there on, at least during periods when they had the means and possibility of communicating with him."

McTiernan J. at p 423 said he did not think that statement by the Commission to be unfair. Jacobs J. at p 442 said:

"There was certainly no obligation on him to ask or keep asking for suitable employment. The section does not so provide though if he does so that will be some evidence of his readiness and willingness."

Gibbs J. at p 432, said:

"The statement by the Commission that an employer has a duty to seek out a worker and to provide him with suitable employment is too widely expressed and ignores the element of mutuality that has been held to be necessary. If the situation of the worker is incompatible with his employment by the employer the latter does not fail to provide employment if he does not seek the worker out and make an offer of employment to him."

The authorities establish that whether there is a breach of s.67 depends on all the circumstances of the case. There is no hard rule that the worker must give notice to the employer in a particular form, or that the worker must be ready, willing and able to work at the precise time when notice is given. In the present case during the period after 8 June 1988 whilst the worker was in fact totally incapacitated for work, s.67 had no application. But the letter of 8 June 1988 made it plain that Mr Hoppo alleged that he was partially incapacitated by his two work injuries and was requesting ANRC to make available to him work for which he was fit. That letter put ANRC on notice about the plight of Mr Hoppo. Thereafter if ANRC took the view that, because of the medical certificates at the time, Mr Hoppo was totally incapacitated for work, it should have monitored his situation thereafter and considered from time to time how, if at all, it would address the obligations imposed on it by s.67.
The corollary of the argument which ANRC has presented to this Court, and which COMCARE has seen fit to support, is that Mr Hoppo should have been paid weekly compensation for total incapacity for work independently of any operation of s.67 from, at the latest, 8 June 1988. In all the circumstances, including the circumstance that ANRC was not paying compensation after receiving the letter of 8 June 1988, I consider ANRC was sufficiently on notice about Mr Hoppo's situation for the operation of s.67 to be attracted when he became fit for work. I do not think the Tribunal fell into error in selecting 26 September 1988. In any event as no compensation was being paid before that date, and as there is no cross-appeal, I do not think that it would be appropriate to vary the decision of the Tribunal even if the contention of ANRC as to the commencement of notional total incapacity under s.67 were in strictness correct.
In argument it was suggested that it was important to Mr Hoppo on the question of his costs of the hearing before the Tribunal that the variation of the decisions under review in his favour was made. It was suggested that under s.67 of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth) the Tribunal had no power to award Mr Hoppo his costs unless the decisions were varied in his favour. If this were the correct construction at one time of s.67, as to which see Re Reserve Bank of Australia and COMCARE and Anor (1990) 12 AAR 160 at 166, the power of the Court to award an employee his costs where an application to the Tribunal for review by a Commonwealth authority fails was put beyond question by the amendments to s.67 enacted by the Industrial Relations Legislation Amendment Act 1991 (Cth), s.8, which came into operation before the Tribunal delivered its decision in this matter. In my opinion the appeal should be dismissed.

[1992] FCA 161

26 MARCH 1992