BARRY LAWSON and STATESHIPS

[2012] AATA 511

[2012] AATA  511

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/5638
Re	BARRY LAWSON
APPLICANT
And	STATESHIPS
RESPONDENT

DECISION

Tribunal	The Hon Robert Nicholson, Deputy President
Date	3 August 2012
Place	Perth

Decision Summary

The decision under review is affirmed.

........[sg].......Hon Robert Nicholson........................................

The Hon Robert Nicholson, Deputy President

CATCHWORDS

Catchwords

COMPENSATION – seafarer – applicant paid under award – whether applicant entitled to a further increase in normal weekly earnings – effect of prior decision of Tribunal – effect of appellate decision of Federal Court of Australia

LEGISLATION

Seafarer's Rehabilitation and Compensation Act 1992 ('the Act')

CASES

Lawson v Stateships [2003] AATA 389

ASP Ship Management Pty Ltd v Wood [2007] FCAFC 142 (ASP Ship Management)

REASONS FOR DECISION

The Hon Robert Nicholson, Deputy President

3 August 2012

1. The applicant is a 66 year old former seafarer, born on 2 August 1945. 

2. The applicant’s claim concerns whether there has been a shortfall in his salary.  It is not in issue that the applicant has been paid all relevant salary increases in accordance with Lawson v Stateships [2003] AATA 389 since 10 June 1994 pursuant to the Maritime Industry Modern Ships Award 1989 (‘MIMSA’), the Norwest Shipping/MUA Enterprise Agreement 2000, the Patrick Norwest Shipping/MUA Enterprise Agreement 2003, the Seacorp Coastal Shipping/MUA Enterprise Agreement 2006 and the Seacorp Coastal Shipping/MUA Enterprise Agreement 2009.

3. The applicant’s claim is that as a consequence of the decision of the Federal Court (French, Tamberlin and Rares JJ) in ASP Ship Management Pty Ltd v Wood [2007] FCAFC 142 (ASP Ship Management) the salary increases awarded to the class of employee in the uncertified agreement described as the Union Bulkships/MUA Enterprise Agreement 1997 (‘the Uncertified 1997 Agreement’) should have been awarded to him and all subsequent payments paid using that as the base salary for the percentage increases awarded in the pre-mentioned enterprise agreements.

   STATUTORY BASIS OF CLAIM

4. Section 31 of the Seafarer’s Rehabilitation and Compensation Act 1992 (‘the Act’) provides for the payment of compensation, to "an employee who is incapacitated for work as a result of an injury", by way of incapacity payments in accordance with a formula which includes the amount of the employee's "normal weekly earnings". The meaning of the expression "normal weekly earnings" is explained in s13 of the Act which relevantly provides:

   "13(1) For the purposes of this Act, if an employee who is a seafarer suffers an injury, the employee's normal weekly earnings are an amount equal to the amount payable weekly to the employee by way of salary under the contract of employment that applied to his or her employment immediately before the injury happened.

   ...

   13(6) If the amount per week payable to employees in a class to which the employee belonged when the injury happened is later increased or reduced as a result of:

   (a) the operation of a law of the Commonwealth, or of a State or Territory; or

   (b) the making, alteration or operation of an award, determination or certified agreement, or the doing of any other act or thing under such a law;

   the normal weekly earnings of the employee before the injury, as worked out under the preceding subsections, must be increased or reduced by the same percentage as that by which that amount per week was so increased or reduced, as the case may be."

   The expression "certified agreement" has "the same meaning as in the Workplace Relations Act 1996": see s3 of the Act. By s4(1) of the Workplace Relations Act 1996 the expression "certified agreement" is defined to mean "an agreement certified under Division 4 of Part VIB".

   PRIOR CLAIMS AND LITIGATION

5. The first relevant decision of the Tribunal (Deputy President TE Barnett; Dr Y S Haslam, Member) was in Lawson v State Ships 16 April 1999 (Lawson No 1).  The decision was that for the purpose of calculating the applicant’s entitlement to compensation. His Normal Weekly Earnings remained governed by the MIMSA Award.  The applicant had submitted that the Uncertified Agreement 1997 which, although never certified by the Industrial Commission, had been used as an agreement which resulted in variation of the base MIMSA Award.  This had resulted in two pay increases of 6% and 4% in respect of a cook on a vessel other than the applicant’s.  The Tribunal found s13(6) of the Act governed the issue, and in the absence of evidence of an increase in the applicable award or a certified agreement,  the applicant’s normal weekly earnings remained governed by the MIMSA Award.

6. On 28 April 2003 the applicant brought an application for review of a deemed reviewable decision of the respondent disallowing his claim for an increase, in accordance with s 13(6) of the Act, in the amount of his ‘normal weekly earnings’ for the purpose of calculating the amount of compensation by way of incapacity payments payable to him pursuant to s 31 of the Act.  On the application (Lawson No 2) the Tribunal, (Associate Professor SD Hotop, Deputy President and Mr M Allen, Member), set aside the decision under review and decided:

   ‘in substitution therefor, … the amount of compensation  by way of incapacity payments payable to the applicant, pursuant to s 31 of the …Act, in respect of his right knee injury sustained on 27 July 1991, is to be calculated on the basis that, with effect from 16 October 2000, his “normal weekly earnings”, within the meaning of s 13 of the Act, are increased by the same percentage as the amount per week payable to an employee classified as a cook/seaman under the “Norwest Shipping/Maritime Union of Australia Enterprise Agreement 2000” was increased by that Agreement.’

7. In the course of its reasons the Tribunal, stated:

   35.The Tribunal accepts that the Act is beneficial legislation and that the concept of "class" of employees, for the purposes of s 13(6) of the Act, should not be understood in such a narrow sense as would tend to frustrate the evident purpose of s 13(6), namely, to ensure that the amount of incapacity payments received by an injured employee under the Act is kept in line with the amount of salary or wages payable, from time to time, to employees of the same class as that to which the injured employee belonged at the time of the injury.

   36.In the Tribunal's opinion the "class" of employees to which the applicant belonged at the time of his injury in July 1991 is appropriately described as that of cook/seaman within the wider class of the crew of the number and composition manning small ships, within the meaning of Schedule A to MIMSA, which operated in the coastal shipping trade off the north-west coast of Australia. It is not appropriate, in the Tribunal's opinion, to define that class more narrowly so as to confine it to employees employed by the respondent alone because the essential character of the class of employees is determined by the nature of their employment, their working conditions, remuneration and other entitlements, not by the identity of their employer (which may, of course, change from time to time).

8. On the issue of whether the amount per week payable to employees in the abovementioned class was subsequently increased or decreased as a result of the making of a certified agreement the Tribunal found as follows:

   39.The employees covered by the 2000 certified agreement comprise "the MUA members who are employed aboard the `Kimberley' pursuant to the provisions of the Award" (namely, MISA) and "this Agreement": see cl 4.1 of the 2000 certified agreement. On the basis of the evidence before it the Tribunal finds that, because the number, composition and work duties of those employees are the same as in the cases of the crew members employed on board the MV Sina, the "Roberta Jull class" vessels and the "Jon Sanders class" vessels, they comprise the same class of employees as that to which the crew members (including the applicant at the time of his injury in July 1991) employed on those vessels also belonged (as described in paragraph 36 above) - namely, the crew of the number and composition manning small ships, within the meaning of Schedule A to MIMSA, which operated in the coastal shipping trade off the north-west coast of Australia. It necessarily follows from that finding that, as a result of the 2000 certified agreement, the amount per week payable to the employees in that ongoing class - which includes the subclass of "cook/seaman" to which the applicant belonged at the time of his injury in July 1991 - increased, within the meaning, and for the purposes, of s 13(6) of the Act.

9. The Tribunal therefore concluded:

   40.On the basis of the abovementioned findings the Tribunal concludes that, for the purpose of calculating the applicant's ongoing compensation entitlements pursuant to s 31 of the Act, his "normal weekly earnings", within the meaning of s 13 of the Act, must, in accordance with s 13(6), be increased by the same percentage as that by which the amount per week, payable to a cook/seaman within the abovementioned class of employees covered by the 2000 certified agreement, was increased by that agreement.

10. The appeal in ASP Ship Management was an appeal from a decision of a judge of the Federal Court on the construction and application of s 13 of the Act.  At par 28 of its reasons the Full Court said:

    28.Unlike ss 13(1), (2), (3), (4) and (5), s 13(6) of the Act is concerned with employees in a class to which the individual belongs whose initial normal weekly earnings have been identified. This is Mr Wood’s position. Section 13(6) does not mention a contract of employment, which is the concept used in s 13(1) and (4), but rather recognises three new means of increasing or reducing amounts payable per week to employees in the class. These three means are:

    • the operation of a law or an act done under it;

    • the making of a new award, determination or certified agreement; and

    • the alteration of an existing award, determination or certified agreement. …

11. Later at par 31 – 32 the Full Court stated:

    31.Importantly, s 13(5) deals with an increase in the amount payable per week because of the operation of the provisions actually governing the person’s employment in three events, namely the attainment of a particular age, the completion of a particular period of service or the increase in salary. In contrast, s 13(6) refers to employees in a class to which the employee belonged having the amount per week payable to them increased or reduced as a result of the operation of a law, thereby involving not just the operation of an award, determination or certified agreement but also the making or alteration of those relationships. In other words, s 13(6) contemplates that following the event which gave rise to the employee’s entitlement to compensation, a new or changed law or award, determination or certified agreement will affect the class of employees to which the employee belonged at the time of his or her injury.

    32.The purpose of s 13(6) is to ensure that a person entitled to compensation because he or she has been injured while in employment regulated by the Act should maintain a level of compensation on par with what is paid later to persons who did similar work at the time the injury was sustained.   …

12. At par 35 the Full Court concluded:

    35.There is no reason in principle why all three generic industrial arrangements referred to in s 13(6)(b) may not be in place at the one time in relation to a variety of employees performing similar work but in differing industrial environments (such as the ‘blue water segment’ and ‘offshore segment’) which provide different rates of remuneration. If an injured employee is qualified or able to be employed in one or more of those industrial environments, and the old position held by the employee at the time of injury no longer exists (or the award determination or certified agreement has been abolished or is no longer in force), then s 13(6) places the person in a class of employees. The section then requires the employer liable for compensation, or the Tribunal, to increase or reduce the normal weekly earnings by identifying a hypothetical amount against which to calculate an increase or decrease, if no more precise comparator is available.

13. The Full Court found that the Tribunal had failed to determine the percentage increase after the class had been selected, the determination of class being required to precede the calculation of the appropriate percentage increase: par 38.

    APPLICANT’S CONTENTIONS

14. Against this background the applicant argues that the decision in Lawson No.2 shows it was the intent of the Tribunal that his compensation payments should be on par with that paid under the 2000 Certified Agreement and that the payments should have continued to keep pace with changes in salary to the class of employee to which he belonged.   

15. He argues in support that the MIMSA Award was not in force at the time (his entitlement to compensation arose) and the percentage rate of increases was based on a defunct enterprise agreement because the class of employee to which he belonged was receiving increases in salary by way of an Enterprise Bargaining Agreement.He cites the evidence of Mr Viola to the hearing of the Tribunal in Lawson as authority that MIMSA and MISA, under which the applicant continues to be paid, have effectively been left behind by individual enterprise agreements so that the applicant and any other person is a similar situation may be the only persons paid under MISA.  (See Tribunal reasons par 29).

16. The applicant relies particularly on pars 32 and 35 of Lawson and 35 of ASP Ship Management.  He submits that he has not maintained a level of compensation on par with that paid to those who did similar work and the payments have not kept in line with the amount of salary or wages payable, from time to time, to employees of the same class as that to which he belonged at the time of his injury. He reads the conclusion in Lawson as showing the intent of the Tribunal that his compensation payments be on par with that paid under the 2000 Certified Agreement.  He submits that his normal weekly earnings must be increased pursuant to s13(6) of the Act by the same percentage as that by which the amount per week, payable to a cook/seaman within the abovementioned class of employees covered by the 2000 Certified Agreement, was increased by that agreement. 

17. Additionally the applicant contends that ASP Ship Management entitles him to an increase in payments because Lawson No 1 was in error of law.

    RESPONDENT’S CONTENTIONS

18. I will refer to the respondent’s contentions where relevant in the course of setting out my views on the applicant’s submissions.

    CONSIDERATION OF CONTENTIONS

19. I agree with the submission for the respondent that what ASP Ship Management is authority for, consistently with s 13(6) of the Act, is that a new or changed law or award, determination or certified agreement following the event which gives rise to the employee’s entitlement to compensation will apply to that employee if the employee is within the class of employees to which the new or changed law or award, determination or certified agreement applies.  It goes further and states that if no award, determination or certified agreement exists in relation to an employee or has been abolished, s 13(6) of the Act requires the employer liable for compensation, or the Tribunal, to increase or reduce the normal weekly earnings by identifying a hypothetical amount against which to calculate an increase or decrease, if no more precise comparator is available (ASP Ship Management at [35]). The reference to the identification of a hypothetical amount refers to the determination of an amount in circumstances where the old position held by the employee does not exist or an award, determination or certified agreement is not in force for the purposes of determining a figure to which the new award, determination or certified agreement can be applied.

20. This reasoning in ASP Ship Management is confirmatory of the foundation of the Tribunal’s reasoning in Lawson No 1: namely that it is the provisions of s 13(6) of the Act which must be complied with in the present circumstances.  Those provisions require that the increase or reduction of the amount per week occurs as a result of one of the three options (the operation of a law, the making of an award, determination or certified agreement or the doing of any other act or thing under such a law) having occurred in the law.  It gives no foundation for substituting such an event occurring outside the law. The reference to ‘hypothetical amount’ is not an invitation to substitute an amount reached outside the requirements of s 13(6).   

21. For the same reason I accept the view that the 1997 draft agreement, being uncertified, cannot constitute a basis for an increase in the applicant’s salary pursuant to s 13(6) of the Act. 

22. Additionally it should be said that the decision in Lawson No 2 is not that the base of the applicant’s salary should be increased; rather that the normal weekly earnings be ‘increased’ by the same percentage payable to a cook/seaman with the abovementioned class of employees covered by the 2000 Certified Agreement.  The reference to the latter agreement followed from a finding that the MIMSA Award had been superseded by the MISA Award and that on 17 October 2000 the Norwest Shipping/Maritime Union of Australia Agreement was certified by the Australian Industrial Relations Commission with effect from 16 October 2000 and that agreement applied to the applicant (see pars [7]-[8], [40].  These findings are unchallenged by the applicant, who relies upon the four agreements previously referred to.

23. One can understand the applicant’s desire to have his position not adversely different in the strength of his normal weekly earnings from what he considers is the present entitlement of employees on the same base as himself.  In my opinion, there is nothing in the case presently brought by the applicant which would entitle him to any adjustment of his normal weekly earnings permitted by s13(6) of the Act.

24. I note that there is evidence of amounts paid to him by the respondent and that on 15 March 2010 the applicant had decided to accept the respondent’s offer as ‘final settlement’ of the arrears owing.

    CONCLUSION

25. For the above reasons, the decision under review is affirmed.

I certify that the preceding 25 (twenty five) paragraphs are a true copy of the reasons for the decision herein of Deputy President Robert Nicholson.

.........(sg) C Akpala...................................

Associate

Dated 3 August 2012

Date(s) of hearing	12 June 2012
Applicant	In person
Solicitors for the Respondent	Mr W Naseem Cocks Macnish