Berri (NSW) Ltd v Moxham
[2005] NSWWCCPD 55
•28 June 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Berri (NSW) Ltd v Moxham [2005] NSW WCC PD 55
APPELLANT: Berri (NSW) Ltd
RESPONDENT: Gary Moxham
INSURER:QBE Workers Compensation (NSW) Ltd
FILE NUMBER: WCC 7956-04
DATE OF ARBITRATOR’S DECISION: 2 November 2004
DATE OF APPEAL DECISION: 28 June 2005
SUBJECT MATTER OF DECISION: Entitlement to weekly payments during partial incapacity: section 40 of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Diana Benk, Solicitor, QBE Workers Compensation (NSW) Ltd
Respondent: Firths, Compensation Lawyers
ORDERS MADE ON APPEAL: That part of the decision of the Arbitrator dated 2 November 2004 ordering the Appellant, Berri (NSW) Ltd, to pay the Respondent, Mr Moxham, weekly compensation from 1 July 2004 and continuing, is revoked and the following decision is made in its place:
(1) The Appellant is not liable to pay the Respondent weekly compensation from 1 July 2004 pursuant to section 40 of the Workers Compensation Act 1987. The decision of the Arbitrator is otherwise confirmed.
(2) No order is made as to the costs of this appeal.
BACKGROUND TO THE APPEAL
On 12 November 2004, Berri (NSW) Ltd (‘Berri’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 2 November 2004.
The Respondent to the Appeal is Gary Moxham.
Mr Moxham was born on 9 October 1954 and is aged 50. He commenced employment with Sunburst Foods in November 1989. That company subsequently became National Foods Ltd and then Berri. Mr Moxham commenced his employment with Sunburst Foods as a pallet packer and later became a machine operator. On 7 February 1996, he slipped on a mouldy floor at work, landing on a steel beam and injuring his back. He was off work for about 6 weeks, initially returning to work on light duties. Mr Moxham states that when, after about eight months on light duties, he returned to his pre-injury duties as a machine operator, his injury prevented him from performing the overtime he had undertaken before the accident. In late 1999, he was offered a new position within the company as a factory cleaner, operating two machines - a factory floor scrubber and a sweeper. He accepted this position because the work placed less pressure on his back. However, whilst he is paid at the higher penalty rate for the cleaning work he does on Sundays when the factory is quieter, he claims he does not have the opportunity to work overtime in the way he did as a machine operator and, in any event, the 40 hours a week that he now works is the limit of his physical capacity.
Mr Moxham lodged a claim for compensation for permanent impairment that was settled in the Compensation Court of NSW on 27 July 1999, with Sunburst Foods agreeing to pay him the sum of $9,000 in respect of a 15% permanent impairment of his back.
By letter dated 15 March 2004, Mr Moxham’s solicitors sent Berri a compensation claim for weekly benefits at the rate of $1,100 gross per week from 1 April 1996 and continuing (with credit for earnings and weekly payments to date), together with a further lump sum of $3,000 in respect of a 5% permanent impairment of his back and $16,450 in respect of a 35% permanent loss of efficient use of his sexual organs, $20,000 in respect of pain and suffering, and medical and other treatment expenses.
No decision having been made by Berri, on 12 May 2004, Mr Moxham filed an ‘Application to Resolve a Dispute’ with the Commission. The Application was registered by the Commission on 18 May 2004. On 13 August 2004, the Arbitrator conducted a teleconference with the parties. Subsequently, on 29 September 2004, she conducted a conciliation and, there having been no settlement, an arbitration. On 2 November 2004, the Arbitrator made the determination set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 2 November 2004, records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation at the rate of:
•$165.12 per week gross from 1.4.96 to 30.6.97
•$181.49 per week gross from 1.7.97 to 30.6.98
•$101.63 per week gross from 1.7.98 to 30.6.99
•$93.76 per week gross from 1.7.01 to 30.6.02
•$113.64 per week gross from 1.7.02 to 30.6.03
under s40 of the Workers Compensation Act 1987.
2. That the Respondent pay the Applicant $1119.31 gross per week from 1st July 2004 to date and continuing with credit for actual earnings upon production of pay slips.
3. Such weekly payments to continue in accordance with the provisions of the Act.
4. No interest is awarded on the above weekly compensation.
5. That the Respondent pay the Applicant’s section 60 of the Workers Compensation Act 1987 expenses upon production of accounts or receipts.
6. That the Respondent pay the Applicant’s costs as agreed or assessed.
7. That the matter be referred to an AMS of the Registrar’s choice for an assessment of the Applicant’s further impairment of his back due to a deterioration in his condition, and permanent loss of his sexual organs also due to that deterioration.”
In her ‘Statement of Reasons for Decision’, the Arbitrator said the essence of Mr Moxham’s claim is that he is entitled to overtime payments he would have earned but for his partial incapacity arising from the injury. The Arbitrator found that Mr Moxham is partially incapacitated for work as a result of his injuries from 1 April 1996: he has a residual incapacity that precludes him from working some of the overtime if and when it is offered.
In calculating Mr Moxham’s probable earnings had he not been injured, the Arbitrator said it was fair to index his pre-injury earnings, estimated by Mr Moxham as approximately $850 per week, by three and a half percent per annum from 1996 to 2004. She found Mr Moxham incurred no loss of earnings in the years ending 30 June 2000, 30 June 2001 and 30 June 2004 when Mr Moxham earned more than the indexed amount.
ISSUES IN DISPUTE
The issues in dispute in the appeal relate to Mr Moxham’s compensation claim for weekly benefits: in particular, did the Arbitrator err in calculating Mr Moxham’s entitlement to weekly payments of compensation pursuant to section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’)?
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6 and the documents that are before me, including extensive submissions from the parties, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. I note that both parties sought to be heard orally on suggested orders in the event that the appeal is otherwise successful. However, I am not satisfied this is necessary given the nature of the orders made.
Neither party sought to adduce fresh evidence.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act, which states:
“352Appeal against decision of Commission constituted by Arbitrator
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b)at least 20% of the amount awarded in the decision appealed against.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.”
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
With regard to section 352(2), Berri’s solicitors contend that the awards for the period to 1 December 2004 total $58,718 and state Berri is contesting the entirety of the awards in favour of Mr Moxham. In fact, it appears Berri is only challenging the awards in relation to weekly payments. Nevertheless, I am satisfied that the amount of compensation at issue meets the required threshold and that I should grant leave to appeal. Leave to appeal is therefore granted.
SUBMISSIONS AND DISCUSSION
Berri identified eight grounds of appeal. These are considered in turn below.
Grounds 1 and 3.
The first ground is that in order 2, the Arbitrator made errors of law by:
(a) making an award of weekly benefits:
(i) without following the steps required by section 40 of the 1987 Act - in particular without making the calculation required by section 40(2)(b), and
(ii) exceeding the maximum rate prescribed by section 40(5); and(b) making an award allowing credit for actual earnings that had no basis in law: the Arbitrator was required to make the calculation in accordance with section 40.
The third ground is that the Arbitrator failed to give any reasons or otherwise consider the requirement in section 40(1) of the 1987 Act that the award “is to bear such relation to the amount of the reduction as may appear proper in the circumstances of the case”.
Mr Moxham’s solicitors concede that the Arbitrator was obliged to make the appropriate calculation as required by section 40(2), but submit that the Arbitrator found Mr Moxham was working to his full capacity and, therefore, his earnings from time to time in the future will be a fair reflection of his capacity to earn. Otherwise, a true reflection of his post-injury capacity to earn could be obtained by referring to Mr Moxham’s financial records for the past financial years from 1997. Berri respond that Mr Moxham’s “ability to earn post 30 June 2004 would be properly reflected from his earnings over the previous twelve months”. To base this on an average over the period 1997 to 2004 would be unfair because there had been significant pay increases over this period.
Section 40(1) of the 1987 Act states:
“(1) Entitlement
The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.”
The approach to be adopted in determining an entitlement under section 40 was set out by the NSW Supreme Court, Court of Appeal, in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’) at 529. Berri also referred to the decision in Chubb Security Australia Pty Ltd v Trevarrow [2004] NSWCA 344, where the NSW Court of Appeal affirmed the approach adopted in Mitchell. In the present case, that approach required the Arbitrator to take the following steps (Mitchell at 529):
“1. To determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)) …
2. To determine ‘the average weekly amount the worker is earning or would be able to earn in some suitable employment from time to time after the injury’ (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following:‘(a) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A’ …
3. To subtract the figure derived from (2) from the figure derived from (1) (section 40(2)).
4. To decide whether and to what extent that reduction calculated as above bears ‘such relation to the amount of the reduction as may appear proper in the circumstances of the case’ (section 40(1)) …
5. To make an award in the amount arrived at in step (4).”
Although the Arbitrator did not specifically refer to the decision in Mitchell, or to the required five steps, nevertheless, she did determine the following:
(1) The weekly amount Mr Moxham would probably have earned had he not been injured. The Arbitrator found Mr Moxham’s earnings pre-injury were $850 gross per week. Having heard submissions from the parties, she decided that it was fair to index these earnings at three and a half percent per annum over the following years in order to determine what Mr Moxham would probably have earned in those years had he not been injured. She rejected Mr Moxham’s solicitors’ figure of five percent as too high and Berri’s figure of two and a half to three percent as slightly too low. The Arbitrator said in arriving at the figure of three and a half percent, she had taken into account the earnings of both Mr Moxham (who had been classified as a Level 2, Fork Lift Driver) and one of his colleagues, Mr Van Ngo (a higher classification Leading Hand). In the year ending 30 June 2004, Mr Moxham’s probable earnings calculated using this method of indexation were $1,119.31 gross per week (slightly less than his actual earnings of $1,134.34 gross per week) or approximately $59,000 per annum. This is less than Mr Ngo’s earnings in the year ended 30 June 2004 of $61,214.
(2) The average weekly amount Mr Brown would have earned in suitable employment post-injury. The Arbitrator used Mr Moxham’s actual earnings in the years to 30 June 2004 as the amount he would have earned in suitable employment post-injury.
(3) The difference between (1) and (2). The Arbitrator determined there was no shortfall in Mr Moxham’s earnings in the financial years ending 30 June 2000, 30 June 2001 and 30 June 2004 when Mr Moxham earned more than the assessed indexed amount of probable earnings.
However, there is no indication of the Arbitrator having considered whether and to what extent the reduction calculated as above bears “such relation to the amount of the reduction as may appear proper in the circumstances of the case” (section 40(1)) as required by step 4 of the Mitchell approach. Berri submits the Arbitrator should have taken into account that the loss of earnings at issue in this matter relates to loss of overtime that will by its nature fluctuate as a result of changes in the demand for production. Mr Moxham’s solicitors point out that despite an undertaking to produce the wage records of Mr Ngo and another Leading Hand, Berri did not do so until the arbitration hearing. The indexation method was appropriate to avoid prejudice to Mr Moxham by reason of the late production of the documents. However, Berri contends Mr Moxham’s solicitors could have sought an adjournment to consider those records but chose not to do so.
There is no specific indication in her ‘Statement of Reasons for Decision’ that the Arbitrator considered the question of overtime in relation to whether to exercise her discretion under section 40(1). The discretion is not specifically mentioned. Although he referred to the fluctuating nature of overtime, there is also no indication from the transcript of the arbitration hearing that Berri’s Counsel invited the Arbitrator to consider the issue of overtime in relation to section 40(1). In her Statement of Reasons, the Arbitrator does refer to Berri’s submission about the fluctuating nature of overtime, and she does not accept Mr Moxham’s solicitors’ submission that his earnings would have increased to $1,000 gross per week in the year ending 30 June 1997. Despite what the NSW Court of Appeal said in Kesen v Luke Singer Pty Ltd (1989) 5 NSWCCR 298, (1989) 18 NSWLR 566, about the need for a judge to indicate that he or she has carried out the required steps because to do otherwise could be an error of law, I note that in Gregory R Ball Pty Ltd v Stead (1993) 9 NSWCCR 148 (‘Ball’), the NSW Court of Appeal held there was “no need for the trial Judge to refer to the discretion if its exercise was not in issue before him”.
The transcript of the arbitration hearing suggests that Berri’s Counsel did not make it clear to the Arbitrator that the exercise of the section 40(1) discretion was in issue. Nevertheless, I note the decision in Ball was made before the decision in Mitchell, and, in my view, the Arbitrator should have at least indicated in her Statement of Reasons that she had considered step 4 of the Mitchell approach. As it was, she steered a middle course trying to ensure that she was being fair to both parties. The transcript of the arbitration hearing also suggests her role was made more difficult by the argument between the parties at the hearing relating to the late production of documents.
Returning to Ground 1, Berri submits that the award of $1,119.31 gross per week from 1 July 2004 exceeds the maximum rate prescribed by section 40. Section 40(5) states:
“The weekly payment of compensation to an injured worker in respect of any period of partial capacity for work is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity.”
For the period from 1 July 2004 to 30 September 2004, the applicable maximum weekly payment for a worker (with no dependent spouse or children) was $323.00. From 1 October 2004 (to 31 March 2005), the maximum weekly payment was $328.90. Clearly, the award made by the Arbitrator of $1,119.31 gross per week from 1 July 2004, exceeded the maximum permitted award.
Berri also submits that the part of the Arbitrator’s second order “allowing credit for actual earnings upon production of payslips” has no basis in law. In my view, Berri’s submission in this regard is correct. The clear and patent intention of section 40 is that its provisions be used to calculate the amount of weekly compensation payable to an injured worker in respect of a period of partial incapacity. There is no provision in the legislation allowing the employer credit for actual earnings. However, Mr Moxham’s earnings should be taken into account in applying section 40(2) and following the steps required by Mitchell.
I therefore find that the Arbitrator made an error of law in making both the second and, consequently, the third orders in her determination: she should have followed the steps required by Mitchell, including considering the exercise of the discretion in section 40(1), and having regard to the maximum weekly payments permitted.
Had the Arbitrator followed the steps in Mitchell in calculating Mr Moxham’s entitlement to weekly payments for the period from 1 July 2004 to the date of the determination and continuing, the outcome might have been as follows:
Step 1: the Arbitrator not unreasonably decided that Mr Moxham would probably have been earning $1,119.31 gross per week if uninjured.
Step 2: there was evidence that Mr Moxham was earning $1,134.34 gross per week in the financial year to 30 June 2004. His solicitors did not provide evidence of his earnings for the period from 1 July 2004 and, see Ground 2 below, there was no evidence that Mr Moxham’s weekly earnings had decreased in the period since 30 June 2004. Since the evidence of his earnings for the financial year to 30 June 2004 was evidence of recent earnings, this was the most reliable evidence available to the Arbitrator of what Mr Moxham would be able to earn in suitable employment. In my view, she should have used this figure of $1,134.34 in calculating his entitlement for the period from 1 July 2004.
Step 3: required the deduction of the figure derived from step 2 from the figure derived from step 1. On the above figures, this gives rise to a negative – in other words, there was no reduction in Mr Moxham’s earnings for the period from 1 July 2004. Having so determined, it is unnecessary to proceed to step 4, which involves the exercise of the section 40(1) discretion. However, I would comment that it appears to me ‘proper in the circumstances’ to use a figure in step 2 derived from recent actual earnings.
The result of following these steps is that Mr Moxham has no entitlement to weekly payments pursuant to section 40 in respect of the period from 1 July 2004. In my opinion, this is the correct outcome.
Ground 2.
The Arbitrator made an award for the period from 1 July 2004. Berri submits “there was no evidence that the Applicant’s earnings during this period were less than his earnings for the financial year ending 30 June 2004”. In answer to a question from the Arbitrator at the arbitration hearing, Mr Moxham admitted he was currently working overtime. There was no submission from his solicitors that his earnings or ability to earn had decreased from 1 July 2004. Accordingly, Berri submits that the Arbitrator should have made an award in its favour in respect of the section 40 claim covering the period from 1 July 2003 (the Arbitrator having found no liability for the financial year ending 30 June 2004) until the date of the determination.
Mr Moxham’s solicitors note that Berri failed to comply with a direction served on 21 May 2004 to produce “copies of all wage records, payslips …” etc for Mr Moxham. Given the prejudice to Mr Moxham caused by this failure, Berri’s submission should be rejected.
In my view, notwithstanding that Berri had failed to comply with the Direction served on 21 May 2004, it was open to Mr Moxham’s solicitors to produce copies of his wage slips for the period from 1 July 2004 to the date of the hearing to show the amount of his weekly earnings for that period. Given the evidence about Mr Moxham’s earnings in the financial year to 30 June 2004 and the Arbitrator’s finding that he did not suffer a reduction of earnings in that year, it was open to the Arbitrator to make a finding that there was no evidence that Mr Moxham was suffering a reduction in earnings in the period from 1 July 2004.
Ground 4.
Berri submits that the Arbitrator erred by failing to give reasons or otherwise consider the Applicant’s ability to earn as required by section 40(1) of the 1987 Act. She relied on his actual earnings for all relevant periods as evidenced by his group certificates. In my view, while the Arbitrator could be said to have impliedly found that Mr Moxham’s actual earnings were the best reflection of his ability to earn in suitable employment during the relevant periods, she should have approached this by following the steps required by Mitchell.
Ground 5.
Berri submits that the Arbitrator failed to take into account Mr Moxham’s earnings for the periods 1 July 1999 to 30 June 2001 and 1 July 2003 to 30 June 2004, when he did not suffer a reduction in earnings, in assessing his ability to earn for the periods prior to 1999, from 1 July 2001 to 30 June 2003, and post 1 July 2004. Mr Moxham’s solicitors respond in relation to grounds 4 and 5 that the relevant test is what was Mr Moxham’s ability to earn in the labour market in the employ of Berri. Mr Moxham’s evidence is that had he remained in their employment as a machine operator, he would have had overtime available to him. As a factory cleaner, the available overtime fluctuated and he was unable to earn what he would have earned had he remained uninjured performing the work of a machine operator. The increase in earnings for the year ended 30 June 2001 was not available to him for the following two financial years. Berri responds that overtime for machine operators also fluctuates in the same way.
Section 40(3) emphasises that it is ‘ability to earn’ in suitable employment that must be considered in calculating the reduction in earnings of an injured worker. Presumably such suitable employment may involve a component of overtime that, like much overtime, fluctuates with the demand for production. Thus, it would be open for the Arbitrator to find that the worker’s ability to earn may fluctuate if there is an overtime component in the suitable employment.
In my view, the main problem with Arbitrator’s decision is that she did not take a rigorous approach to applying the steps outlined in Mitchell in making the calculations required in determining Mr Moxham’s section 40 entitlement. Had she done so, she would have addressed the issue of ability to earn more specifically. Nevertheless, the Arbitrator found, at paragraph 28 of her ‘Statement of Reasons for Decision’, that Mr Moxham “has a residual incapacity which precludes him working some of the overtime if and when it is offered”. That he has a residual incapacity is clearly supported by the medical evidence of Orthopaedic Surgeons Dr R Wallace and Dr B Trevitt. In his report of 25 August 2004, Dr Trevitt stated Mr Moxham is fit for light varied work with restrictions. The Arbitrator also states, at paragraph 31, that she took into account the annual salaries of both Mr Moxham and Mr Ngo in deciding that an indexation figure of three and a half percent per annum was appropriate. I am not satisfied that Berri have made out Ground 5 and therefore reject this ground of appeal.
Ground 6.
Berri submits that the Arbitrator erred in failing to make an award in favour of Berri for those periods in which Mr Moxham suffered no loss pursuant to section 40, that is the financial years ending 30 June 2000, 2001 and 2004. Mr Moxham’s solicitors concede that Mr Moxham did not suffer a compensable loss in these years but submit that this does not necessitate an award in favour of Berri.
In my view, it was not necessary for the Arbitrator to make an award in favour of Berri for those three financial years. It was sufficient that her determination dated 2 November 2004 did not make an order finding Berri liable to pay weekly compensation to Mr Moxham for those years pursuant to section 40 of the 1987 Act. I therefore reject this ground of Berri’s appeal.
Ground 7.
The Arbitrator found that Mr Moxham “has a residual incapacity which precludes him from working some of the overtime if and when it is offered”. Berri submits that the Arbitrator erred in making this finding, seemingly because she relied on Dr Wallace’s opinion that Mr Moxham would not be fit to perform overtime (report of 28 April 2004), which Dr Wallace formed without being aware that Mr Moxham was, in fact, performing some overtime. Moreover, there is no explanation of what ‘some’ means in this context, nor evidence that Mr Moxham had rejected “some of the overtime if and when it is offered”.
Mr Moxham’s solicitors concede that he has performed and continues to perform some overtime. However, if he was still employed in his pre-injury position as a machine operator, he would not be able to perform all the overtime available to him in that position. The amount of lost overtime is difficult to quantify because the availability of overtime fluctuates over time.
It is clear from the Arbitrator’s ‘Statement of Reasons for Decision’ that she was aware Dr Wallace had formed his opinion on the basis of inaccurate information in so far as he did not know that Mr Moxham was working some overtime. In making her finding, the Arbitrator relied on the medical evidence that Mr Moxham’s capacity for work post-injury is restricted, for example, that of Dr Trevitt in his report dated 25 August 2004. Dr Trevitt states Mr Moxham is “fit for light varied working activities, which avoid repetitive bending, heavy lifting or the operation of vibrating machinery”. The Arbitrator also relied on Mr Moxham’s oral evidence that working for too many hours aggravated his back injury.
In my view, there was sufficient evidence to support the Arbitrator’s finding with regard to Mr Moxham’s residual incapacity and I recognise the difficulty in being more precise than saying Mr Moxham was precluded from working ‘some’ of the overtime, for the reasons given by Mr Moxham’s solicitors. I therefore reject Berri’s seventh ground of appeal.
Ground 8.
Berri submits that the Arbitrator erred in adjusting Mr Moxham’s probable earnings at the annual rate of three and a half percent. Having found that there was “insufficient evidence” to find that Mr Moxham would also have progressed to the classification of a Leading Hand, the Arbitrator should not have relied on the earnings of a Leading Hand, Mr Ngo, in ascertaining the earnings of a comparable employee to Mr Moxham.
Mr Moxham’s solicitors submit that although the Arbitrator referred to Mr Ngo’s earnings, she applied Mr Moxham’s pre-injury earnings of $850 per week and indexed that figure in making her calculation.
In my view, Mr Moxham’s solicitors’ submission is clearly correct. At paragragh 34 of her ‘Statement of Reasons for Decision’, the Arbitrator indexed Mr Moxham’s pre-injury earnings of $850 gross per week. She did, however, refer to Mr Ngo’s earnings “in comparison” to the indexed figure for the financial year ending 30 June 2004, but, it would appear, in terms of the differential between the indexed figure and Mr Ngo’s earnings, and as an indication that the indexation produced a fair result. I therefore reject this ground of Berri’s appeal.
CONCLUSION
The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Berri must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.
For the reasons given above, I conclude that the Arbitrator made an error of law in making order 2 and consequently order 3 of her determination. I am not satisfied that there was sufficient evidence for her to conclude that Mr Moxham suffered a reduction in earnings for the period from 1 July 2004. Moreover, order 2 exceeds the maximum rate prescribed by section 40 and purports to allow credit for actual earnings that has no basis in law. Essentially, the Arbitrator made an error of law by failing to follow the steps set out in Mitchell in calculating Mr Moxham’s entitlement to weekly payments for the period from 1 July 2004. In my view, since the evidence of Mr Moxham’s weekly earnings in the financial year to 30 June 2004 shows that he did not suffer a reduction of earnings in that year, and there is no evidence to indicate that his weekly earnings reduced in the period from 1 July 2004, the appropriate course is for me to substitute for orders 2 and 3 of the Arbitrator’s determination an order that Berri is not liable to pay weekly compensation to Mr Moxham from 1 July 2004.
I note that although Mr Moxham is currently employed in suitable employment and not suffering a reduction in weekly earnings when compared with his probable pre-injury earnings, he does, nevertheless, have a residual incapacity for work for his pre-injury duties.
DECISION
That part of the decision of the Arbitrator dated 2 November 2004 ordering the Appellant, Berri (NSW) Ltd, to pay the Respondent, Mr Moxham, weekly compensation from 1 July 2004 and continuing, is revoked and the following decision is made in its place. The Appellant is not liable to pay the Respondent weekly compensation from 1 July 2004 pursuant to section 40 of the Workers Compensation Act 1987. The decision of the Arbitrator is otherwise confirmed.
COSTS
No order is made as to the costs of this appeal.
Robin Handley
Acting Deputy President
28 June 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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