Bi-Lo Pty Ltd v Burns - [2011] NSWWCCPD 49

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Bi-Lo Pty Ltd v Burns [2011] NSWWCCPD 49
APPELLANT:		Bi-Lo Pty Ltd
RESPONDENT:		Melanie Burns
INSURER:		Coles Group Limited
FILE NUMBER:		A1-7778/10
ARBITRATOR:	Mr R Caddies
DATE OF ARBITRATOR’S DECISION: DATE OF APPEAL HEARING:		21 April 2011 22 August 2011
DATE OF APPEAL DECISION:		6 September 2011
SUBJECT MATTER OF DECISION:		Psychological injury; whether worker totally or partially incapacitated; how to assess; relevance of work performed on a rehabilitation program; application of principles in Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 and Steggles v Aguirre (1988) 12 NSWLR 693
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		Oral
REPRESENTATION:		Appellant:	Mr P Barnes, instructed by TurksLegal
Respondent:	Mr M Best, instructed by R J O’Halloran & Co
ORDERS MADE ON APPEAL:		The Arbitrator’s determination of 21 April 2011 is confirmed. The appellant employer is to pay the respondent worker’s costs, assessed at $2,200 plus GST.

BACKGROUND

Ms Burns is 21 years old. She started work for Bi-Lo Pty Ltd (Bi-Lo) (a subsidiary of Coles Group Limited) in mid-2006. It was her first job after leaving school that year. She worked as a check-out assistant at Bi-Lo’s Tamworth South store. While at work on the evening of 19 June 2008, she was the victim of a violent armed hold-up by three men of Aboriginal appearance wearing balaclavas.
In the course of that hold-up, she had a knife held to her neck and was pushed towards the service desk area. The assailant who held a knife to her throat said words to the effect of “fucking give me the money now”. At the time of the hold-up, Ms Burns was the only person working at the check-out register.
As at 19 June 2008, Ms Burns was a permanent part-time employee working about 28 hours per week. The incident left her shaken and upset. She sought treatment from her general practitioner, Dr Loeve, who certified her unfit for work and referred her to a psychologist and psychiatrist. She remained off work until Dr Loeve certified her fit for suitable duties for six hours per week from 29 October 2008. Ms Burns was not to do any front counter work and was to work with a “buddy”.
Ms Burns returned to work with these restrictions at the Tamworth Coles Central store and gradually increased her hours throughout 2008 and 2009. On 11 August 2009, Dr Loeve certified her fit for suitable duties for 24 hours per week, with 30 minutes working without a buddy. As the working independently had not been successful, on 12 August 2009, Dr Loeve reduced her hours to 20 per week and recommended that she work with a “constant buddy”.
Ms Burns stopped work on a date not identified in August 2009 to take holidays and other leave in lieu, and then started maternity leave on 14 September 2009, having fallen pregnant in February of that year.
She claimed weekly compensation for total incapacity from 14 September 2009 to date and continuing. Bi-Lo has not disputed that, as a result of the hold-up, Ms Burns suffered a psychological injury (a major depressive disorder and post-traumatic stress disorder). The issue in dispute before the Arbitrator was whether, as at September 2009, Ms Burns was totally or partially incapacitated for work.
In a reserved decision delivered on 21 April 2011, the Arbitrator found Ms Burns to be totally unfit and entitled to compensation accordingly. The Commission issued a Certificate of Determination on 21 April 2011 in the following terms:
“The Commission determines:
1. That the respondent pay the applicant weekly compensation under section 36 of the Workers Compensation Act 1987 (the 1987 Act) at the rate of $391.52 per week from 14 September 2009 to 25 October 2009.
2.    That the respondent pay the applicant weekly compensation under section 37 of the 1987 Act at the rate of:
(a)    $391.52 per week from 14 September 2009 to 25 October 2009;
(b)    $396.10 per week from 26 October 2009 to 5 November 2009;
(c)    $470.70 per week from 6 November 2009 to 31 March 2010;
(d)    $479.70 per week from 1 April 2010 to 30 September 2010 ;
(e)    $486.10 per week from 1 October 2010 to 31 March 2011, and
(f)$496.00 per week from 1 April 2011 to date and continuing, such weekly payments to continue in accordance with the provisions of the 1987 Act.
3.    Remit the matter to the Registrar for referral to an Approved Medical Specialist (AMS) on the following basis:
(a)                 Date of Injury: 19 June 2008
(b)                 Matters for assessment: Permanent impairment (psychological)
(c)                 Method of Assessment : Whole person impairment
(d)                 Evidence :
(i)Application to Resolve a Dispute (the Application) and attached documents;
(ii) Reply to the Application and attached documents;
(iii) Letter from Turks Legal to RJ O'Halloran & Co dated 1 July 2010;
(iv)Letter from Turks Legal to RJ O'Halloran & Co dated 27 October 2010;
(v) Application to Admit Late Documents lodged by the respondent on 3 November 2010 attaching report of Dr Wendy Roberts dated 1 November 2010 (but excluding matters disallowed as to which see sealed envelope), and
(vi) Application to Admit Late Documents lodged by the respondent on 3 December 2010 (excluding surveillance report and DVDs which relate to the wrong person as to which see sealed envelope).
NOTE: The material in the sealed envelope with disallowed evidence is NOT to be referred to the AMS.
4.    Order that the matter be referred back in relation to section 67 compensation, if appropriate.
5.    Order the respondent pay the applicant’s costs as agreed or assessed.
6.    I certify the matter is complex and order an uplift in costs of 30 per cent (both parties).”
In an appeal lodged on 18 May 2011, Bi-Lo has challenged the Arbitrator’s finding that Ms Burns was totally incapacitated from 14 September 2009 to date and continuing.

ISSUES IN DISPUTE

Bi-Lo submitted that the Arbitrator erred in:
(a)     failing to give any or any sufficient weight to the evidence from Dr Loeve that Ms Burns was fit for suitable duties and therefore only partially incapacitated;
(b)     misinterpreting and misdirecting himself as to the evidence from Dr Clark, a psychiatrist qualified by Ms Burns, by finding that Dr Clark supported the finding of total incapacity;
(c)     misdirecting himself by finding that the evidence from Ms Burns supported a finding of total incapacity;
(d)     misunderstanding and misdirecting himself as to what is meant by total incapacity and misinterpreting the reasoning of Mahoney P in Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 (Lawarra);
(e)     taking into account matters that were not in evidence and taking into account irrelevant considerations, namely, that working with a buddy was “hardly a commercial arrangement”;
(f)      finding that Ms Burns was totally incapacitated even when she was working in modified duties with a buddy, and
(g)     finding, contrary to the evidence, that the worker’s condition in August 2009 was consistent with her being unable to “carry on any duties”.

THE EVIDENCE

Ms Burns signed a statement on 4 May 2010 in which she said that, after the robbery, she had problems sleeping, she missed meals and lost weight, had reduced libido, was regularly tearful, and did not want to go out and socialise. She had difficulty concentrating and had panic attacks. Prior to the robbery, she enjoyed going to work and interacting with people.
Belinda Cross, intern psychologist, and Kelly Ritchie, psychologist, assessed the worker on 1 July 2008. They reported on 5 July 2008 that Ms Burns presented as extremely agitated and anxious, as indicated by her continual fidgeting and rubbing and scratching of her hands. She reported that she had worked on the “close” shift on 19 June 2008, which required her to work alone on the cash registers until the store closed at 9.00 pm.
At 8.40 pm, three men of Aboriginal appearance, wearing balaclavas, came through the side door and demanded money from Ms Burns. She said that one of the men grabbed her by the arm, held a knife to her throat and pushed her behind the service desk. After the offenders left, she had to scream for help because the public address system was not working. She found the robbery terrifying.
Ms Burns said that her job at Bi-Lo was her life and she enjoyed working there.
Her symptoms as at 1 July 2008 included:
(a)     broken sleep;
(b)     hypervigilance;
(c)     nightmares;
(d)     recurrent and intrusive thoughts;
(e)     flashbacks;
(f)      reduced appetite;
(g)     impaired cognitive responses, and
(h)     anxiety, including constant fidgeting, dry mouth, sweating, shaking, heart palpitations and urinary incontinence.
She said that, since the robbery, she had extreme difficulties with concentration and memory. She felt that everything was a “blur” since the robbery. Her nightmares were very distressing, always very violent, and frequently involved killings, armed robberies and Aboriginals.
Ms Ritchie and Ms Cross diagnosed Ms Burns to have an acute stress disorder and recommended counselling. They reported on 28 October 2008 that, since their previous report, the worker’s psychological wellbeing had been “challenged”. She continued to experience ongoing symptoms of anxiety, including fidgeting, dry mouth, sweating, shaking, tears and heart palpitations. She continued to experience hypervigilance, intrusive thoughts and nightmares. She described feeling constantly “paranoid” that people were looking at her and she became very anxious if anyone she did not know approached her or said hello. She became extremely anxious when she was outside the safety of her house and had become extremely reliant on her partner for “protection”. She did not feel comfortable going anywhere without him. As a result, she had retreated into herself and avoided leaving the house and engaging in social situations on her own.
The worker’s thoughts were particularly distressing to her. She told Ms Ritchie and Ms Cross that she constantly thought about “horrible” things including violence, murder and death. She reported automatic thoughts and assumptions, including “I’m not safe”, “others cannot be trusted”, “if someone asks me about what happened I’ll freak out”. Therapy was focused on relaxation techniques and providing strategies to restructure unhelpful thinking processes, which Ms Burns had been able to effectively use. Just before their last session, Ms Burns had been issued with a certificate for suitable duties. Ms Burns did not want to return to work and was extremely anxious. On talking about her return to work, she became “teary, shaky and began catastrophising”. Relaxation techniques and thought restructuring strategies were reinforced.
After her return to work in October 2008 at the Tamworth Coles Central store, Ms Burns initially worked two hours per day on three days per week between 10.00 am and midday. Her job was to put in new layouts. She was placed with Janelle Horne, who worked with her as her “buddy” until the worker started her holidays in August 2009. She was not to work alone.
Ms Burns said in her statement that the buddy system meant that someone was with her during her working hours. If her buddy left her, “she was panicking” and would get “tearful and frightened”, thinking she was going to be the subject of a further assault. She would not talk to any customers or other staff she did not know. She started to shake at times. She was “really frightened to go to work”. She said she was “deeply embarrassed and ashamed” of her reaction after returning to work. She felt embarrassed because she felt she could not live like a normal person and needed someone she trusted with her all the time.
Under a certificate from Dr Loeve, Ms Burns increased her hours to 12 per week on 19 November 2008, with no counter work and a continuation of the buddy system. He increased her hours to 16 per week for the period 10 December 2008 to 5 March 2009, with the same restrictions as before.
Ms Burns became pregnant in February 2009.
Between 5 March 2009 and 11 August 2009, Dr Loeve certified Ms Burns fit to perform suitable duties for 20 hours per week, with the same restrictions. Ms Burns worked these increased hours.
On 29 April 2009, Ms Cross and Ms Ritchie reported to Dr Loeve that the worker’s psychological wellbeing continued to be “challenged”. She had recently found out that she was pregnant and that had increased her distress. She had discontinued all medication and, as a result, her symptoms had increased and she had experienced an increase in her post-traumatic stress symptomatology. The worker’s psychological presentation was consistent with, and had been revised to include, post-traumatic stress disorder and major depressive disorder.
On 14 May 2009, Dr Walker, the worker’s treating psychiatrist, reported that Ms Burns still met the criteria for major depressive disorder and post-traumatic stress disorder, and that the robbery had caused her condition. He did not think she was fit to increase her hours above the 20 hours per week set by Dr Loeve. The worker said she derived significant benefit from the buddy system, but, when her buddy left her for up to four minutes at a time, she became acutely anxious. He did not believe she “could attend work without the buddy system”. He did not know when or if Ms Burns would return to her full pre-injury duties and did not believe she could reliably be issued with a final WorkCover medical certificate for pre-injury or permanently modified duties before early 2010. The worker’s symptoms had improved overall with regular psychological treatment. He wanted to keep seeing her every three months or so.
On 15 June 2009, Michael Winkle, injury management adviser with Coles, wrote to Dr Walker. He said that, over the recent weeks and months, the return to work coordinator, Ms Asbury, had described a steady decline in the worker’s attitude and application towards her work. The store manager, David Freeman, agreed with Ms Asbury’s observations and mentioned that Ms Burns had taken to not giving him eye contact during their one-on-one conversations, which was in contrast to her manner when she commenced at the store in October 2008. The worker was attending her psychology sessions during the course of her shifts and not returning to work. Her productivity had dropped significantly and she had sometimes been noticed leaving the store early. It had become apparent that Ms Burns had become “solely co-dependent on her in-store buddy ‘Janelle’ with whom she had worked since the commencement of her work trial in 2008”. The worker had recently taken leave when Ms Horne took leave. Mr Winkle said that the work trial employer (Coles) could offer alternate work in another department, for example, in the delicatessen department.
Ms Burns saw Dr Walker on 10 August 2009 and he reported to Dr Loeve on 24 August 2009. Dr Walker said that Ms Burns had ongoing symptoms of depression and anxiety. She had panic attacks at work when left alone for more than one minute. She rarely left her house on her own, frequently cried at work and had regular nightmares. She had not taken antidepressants since March 2009, but was seeing Belinda Cross fortnightly. Another psychologist, Kelly Ritchie, saw the worker the previous week and suggested that she return to full-time hours before taking maternity leave.
On review, Dr Walker found Ms Burns to be “persistently tearful and anxious”. She had no psychomotor retardation and no symptoms or signs of psychosis. She denied planning harm to herself or others. She would “consider working in the deli or bakery at Coles”. He concluded:
“Melanie’s symptoms of depression and anxiety persist. She is dependent on others. She could benefit from a two-week trial of working in the deli or bakery. I am increasingly concerned that continuing her current buddy arrangement at work will increase her reliance on others and make her more impaired. Thank you for increasing her certified hours at work to 6/day, 4d/week, and for certifying her fit to work for 30 minutes without a buddy. I discussed her need for intensive postnatal support with Dr Khanna, treating GP. I will see Melanie again in mid–late November 2009.”
On 11 August 2009, Dr Loeve certified the worker fit for suitable duties for 24 hours per week, six hours per day four days per week. The buddy system was to continue, but “with 30 minutes working off [the] buddy system as a trial”. He added, “Dr Walker has stated [the worker] can increase hours at this time. Also introduce 30 minutes off buddy system”. The worker’s fitness for work was to be reviewed on 8 September 2009.
On 12 August 2009, Dr Loeve certified Ms Burns fit for suitable duties for 20 hours per week, five hours per day, four days per week. The buddy system was to continue. The trial of working for 30 minutes “in safe area working independently” was not successful and Ms Burns was to “[r]eturn to previous supervision/hours, regular constant buddy”.
Ms Burns stopped work in August 2009. She took holidays and other leave, and started maternity leave on 14 September 2009. Weekly compensation payments stopped on the commencement of her maternity leave and Ms Burns has lived on Centrelink payments since that time.
Ms Burns said (at [15] of her statement):
“I feel as though I cannot go near a supermarket and I am very frightened of stepping foot inside a supermarket. I found when I went back to work during 2009 and my hours were graduated, I was reliving situations and I was entirely fearful when I was working even with someone along side of me. My fears and symptoms dramatically increase when that person would go away even for short periods inside the store.”
Ms Asbury said that the worker was very withdrawn on her return to work. Though Ms Burns had initially progressed well on her return to work, she was opposed to working without a buddy. Ms Asbury recalled occasions when the worker had been tearful at work, but that was not on every shift. She was usually tearful after a medical appointment or if a customer had approached her and queried where an item was. She did not see the worker shaking, but it was hard to know if she was agitated because she was a withdrawn person. She said that “we were trying to get [the worker] to work independently however she was opposed to this – she had become dependent on a buddy”.

Ms Burns gave birth on 6 November 2009.
Dr Clark, consultant psychiatrist, examined the worker at the request of her solicitor on 9 March 2010. He diagnosed post-traumatic stress disorder with an ensuing severe depression. She had prominent associated anxiety features including panic attacks with agoraphobia. At the time of his examination, Ms Burns was taking antidepressant medication, without which it was “reasonable to assume she would be in an even worse state”. When asked about permanent restrictions that should be placed on Ms Burns in terms of her work capacity, and if she was unfit for her normal full-time hours, Dr Clark said:
“Not fit for employment. Fit for other limited work but depends on effective rehabilitation.”
He added that Ms Burns was “depressed anergic and fatigued” and needed daily domestic care and help. Under the “Psychiatric Impairment Rating Scale” Ms Burns was “Class 4” under “Employability”, which meant:
“severe impairment: cannot work more than one or two days at a time, less than twenty hours per fortnight. Pace is reduced, attendance is erratic.”
Class 5 is “totally impaired: cannot work at all”.
In her May 2010 statement, the worker said that she was extremely fearful of further assaults and that she liked to stay at home with her baby. She was fearful and suspicious of other males, especially Aboriginals. She did not even visit her mother and had lost all her friends because she did not go out. She had difficulty concentrating and could not read and take in all the information. She felt that she could not go near a supermarket and was frightened of stepping inside a supermarket. When she went back to work in 2009, she was “reliving situations and was entirely fearful” when she was working, even with someone alongside her. Her fears and symptoms would dramatically increase when that person left, even for short periods inside the store.

Dr Walker saw Ms Burns again on 11 May 2010. In his report of 28 May 2010 to Dr Loeve, he recorded that the worker’s partner had stopped work on the birth of their child because she was not coping. He noted that she was on maternity leave until August 2010. She continued to have symptoms of depression and anxiety. She had horrible dreams every night, dreamt of the robbery every second night and had “flashbacks of the robbery every two weeks”. She had panic attacks daily. She felt okay when at home with her partner and child. She had a morbid fear (phobia) of Aboriginal men.
In terms of treatment, Ms Burns had taken an antidepressant for about a month from December 2009, but it made her feel horrible. She had not seen a general practitioner since Dr Khanna left Peel Healthcare. On review, the worker was agitated, tearful and highly anxious. She was cranky that Ms Cross had discontinued treatment (because the worker had failed to attend eight appointments over two years). She had psychomotor agitation and did not want to return to work with Coles. She wanted to move away from Tamworth because she worried that too many people knew where she lived, and she did not feel safe. He concluded:
“Melanie’s depression and anxiety persist following the armed robbery at work in June 2008. If you are still her Nominated Treating Doctor, please consider issuing a final WorkCover medical certificate for permanently modified duties, excluding her from working for Coles or its subsidiaries.”
Dr Walker added that he had spoken to Michael Winkle on 27 May 2010 and suggested engaging a rehabilitation provider to explore external redeployment.
On 22 September 2010, Mr Winkle advised the worker that Bi-Lo had approved her request that her maternity leave be extended until 4 January 2011. He added that suitable duties and an ongoing rehabilitation program was available for her at “a host Coles store in Tamworth”.
On 28 September 2010, Dr Loeve certified Ms Burns fit for suitable duties for 20 hours per week (five hours on four days per week) until 14 January 2011. He added, “[b]uddy system when returns to work for initial reorientation, assess graded reduction in buddy requirement over next 3 months”.
The oral evidence Ms Burns gave at the arbitration is considered below.

THE ARBITRATOR’S DECISION

After referring to the evidence, the Arbitrator commended the employer for its attempts to get Ms Burns back to work. He added, at [37]:
“In a commercial sense, however, having had the applicant working indefinitely with a ‘buddy’ is hardly a commercial arrangement and in my view her position is what I would term a ‘made’ job in the hope that she would eventually be assisted to be able to again work alone. The fact that she struggled to leave home alone on foot (after the first six months post-injury), would burst into tears if a customer asked her a question as she was tending to shelves, was thrown into a panic if her ‘buddy’ left her for up to a minute (when off her antidepressant medication during pregnancy) or up to 4 minutes (when on medication) all lead me to conclude that she is in fact totally incapacitated. This view is consistent with the view expressed by Dr Clark qualified by the applicant’s solicitor.”
The Arbitrator then quoted a passage from Lawarra. In that case, Mahoney P observed (at 213) that, in assessing whether a worker is wholly or partially incapacitated, the exercise is a practical one that “involves the assessment of a capacity ‘for work’ having regard to the realities of the labour market in which he [or she] is to be engaged”. The Arbitrator said that the principles in Lawarra applied to the current matter and he added, at [39]:
“Applying those principles, it is clear to me that, from 7 [sic] September 2009 to date and continuing, the applicant has been totally unfit for work throughout the period claimed and even before when she was working in her modified duties but with the aid of a buddy.”
He concluded, at [40]:
“In my view in the applicant’s condition the worker is incapacitated from the [sic] any work, having regard to the realities of the labour market for which she was to be engaged, for which, but for this injury, she might have reasonably be [sic] expected to work unassisted by the sort of ‘mollycoddling’, as the applicant’s counsel described it, with the aid of a ‘buddy’.”
In response to the submission by the employer’s counsel that the worker’s going off work coincided with her starting maternity leave, the Arbitrator said (at [41]) that Ms Burns started her absence in August 2009 by taking annual leave and time in lieu before starting her maternity leave. He then said:
“She testified she went off work in August 2009; that she did not feel she could cope with her work even with the aid of having a buddy. The condition she was in at that time and before was consistent with being unable to carry on any duties. It was this state which caused her to take all the leave she could.”

SUBMISSIONS

The appeal transcript is referred to as “AT” and the transcript of the proceedings before the Arbitrator is referred to as “T”.
In the written submissions filed in support of the appeal, Bi-Lo’s solicitor submitted that the Arbitrator erred in finding Ms Burns to be totally incapacitated from 14 September 2009 because:
(a)     such a finding was against the weight of the evidence;
(b)     Dr Loeve certified Ms Burns fit for suitable duties with her pre-injury employer throughout the whole of the relevant period, but with a buddy. As the treating general practitioner, he had the most contact with the worker and he was best placed to assess her fitness for work;
(c)     Dr Walker considered Ms Burns fit for suitable duties and not totally incapacitated and that was conceded by the worker’s counsel at the arbitration;
(d)     by finding that Dr Clark supported a finding of total incapacity, the Arbitrator misinterpreted and misdirected himself as to Dr Clark’s evidence;
(e)     the lay evidence from Ms Burns supports a finding of only partial incapacity. She had worked on a graded return to work plan for almost one year until the day she voluntarily absented herself to commence a period of leave followed by maternity leave. Ms Burns did not stop work in response to any change in her medical condition. While on the return to work plan, she had increased her hours to 24 per week. There was no evidence of significant regression or setbacks while on the return to work plan;
(f)      the worker’s oral evidence was that she could do the suitable duties with a buddy if it was part of a rehabilitation plan and could do other work for Bi-Lo if she had appropriate support and time to adjust to a return to work plan;
(g)     he misunderstood and misdirected himself as to what is meant by total incapacity, and misinterpreted the decision of Mahoney P in Lawarra. During all relevant periods, Ms Burns had remained employed by Bi-Lo. She was not required to look for work on the open labour market and the “relevant labour market” included the labour market with the pre-injury employer. The Arbitrator erred in ignoring the realities of the work that was available to Ms Burns with the pre-injury employer. The realities of that labour market were that Ms Burns had an employer willing to provide her with suitable duties in accordance with restrictions imposed by Dr Loeve. On the evidence, Ms Burns had (and has) a capacity to perform work with a buddy for 24 hours per week with her pre-injury employer. The realities of the labour market in which she was engaged were that there was work available, which would continue to be available. If the Arbitrator had properly applied the reasoning in Lawarra, he would have found Ms Burns to be partially incapacitated;
(h)     by finding (at [37]) that having the worker work indefinitely with a buddy was “hardly a commercial arrangement”, the Arbitrator assumed evidence that was not adduced, namely, the “commerciality” of the buddy arrangement;
(i)      the Arbitrator’s misunderstanding of what is required to establish “total incapacity” is evidenced by his “bizarre and illogical” finding (at [39]) that the worker was totally incapacitated “when she was working her modified duties”, and
(j)      the Arbitrator erred in stating (at [41]) that Ms Burns testified that, when she stopped work in August 2009, she did not feel she could cope with her work, even with a buddy.
At the oral hearing of the appeal, Mr Barnes submitted that the Arbitrator erred at [41] of his decision, where he said that Ms Burns had testified she went off work in August 2009 and that she “did not feel she could cope with her work even with the aid of having a buddy”. He relied on the evidence in cross-examination where Ms Burns said (at T27.38) that, as at August 2009, she could do the work with Coles with a buddy. He said that total incapacity had not been made out because the worker had demonstrated a capacity to earn.
He said that Ms Burns had been given work that she could do and the process of putting someone with her “was done for the Applicant’s psychological wellbeing, to provide a support mechanism for her and to assist in the rehabilitation program” (AT7.15). Ms Burns was able to do the work offered and did it until she took leave. Therefore, so it was argued, she had and has a capacity on the open labour market to work up to 24 hours per week.
Counsel for Ms Burns, Mr Best, argued that the Arbitrator’s finding of total incapacity was a finding of fact based on his assessment of the totality of the evidence and was consistent with the evidence. That evidence included the worker’s oral evidence at the arbitration that, by July 2009, she found it difficult to go to work and, though she did it, it was hard on her and she would go home stressed and worry about it all night (T25.33). She felt horrible about the suggestion that she work alone for 30 minutes and added (at T25.42) she:
“felt like they were chucking me in the deep end. Um, my buddy had left me for maybe 30 seconds or something before and they suggested 30 minutes. And when I tried to do it I just freaked out, I couldn’t, I couldn’t be there. I couldn’t be standing there working by myself it was horrible. I just, yeah, I couldn’t do it anymore.
Q. Did you feel that you, that you could do, do the work or not?
A. I could not. I could not do it alone, just knowing that anybody could come up to me or ‑ it was, yeah it was horrible. I could not ‑ I could just not physically do it by myself.
Q. Alright. At any time since you went off work, have you felt able to go back to work?
A. No.
Q. Why not?

A. I don’t want, I don’t want to be feeling like that again. I don’t want to feel the way that I did in those few minutes where I was by myself and yeah, I don’t want to feel like that again. I don’t, I don’t want that. I want, you know I wanted to be able to go back to work to get on with my life, but it was ruining my life. So I don’t want to feel like that.”

In re-examination, Ms Burns said (at T28.44):
“Q. As at the date that you stopped work did you feel able to go to work, even with the buddy, or not?
A. I, it was a struggle to go to work, but I knew that I had to try. Um, I didn’t want to go but I just did it.
Q. Okay. And you’d take that same attitude to any potential return to work after your maternity leave, is that right?
A. I suppose so, yes.”
Mr Best submitted that, based on the principles in Steggles v Aguirre (1988) 12 NSWLR 693 (Steggles) and Wicks v Union Steamship Company of New Zealand Ltd [1933] HCA 58; 50 CLR 328 (Wicks), the worker’s job with Coles was “special employment” that was not available on the open labour market. He said that it was never put to Ms Burns that she was fit for work on the open labour market and the suggestion that Ms Burns could work in a large storeroom outside Coles did not arise.

DISCUSSION AND FINDINGS

The appeal must fail.
The appellant’s submissions have ignored longstanding authority that, in assessing a worker’s capacity for employment, the Commission must decide “what the worker was able to earn simply by his [or her] own ability as a worker and not taking into account amounts he [or she] might be paid for other reasons” (per Priestley JA, Hope and McHugh JJA agreeing, in Steggles at 704D). Once a worker has ceased earning, then, in assessing his or her ability to earn, the Commission must determine the worker’s ability to earn as a worker “in the open labour market” (Steggles at 699A, citing Starke J in Williams v Metropolitan Coal Co Ltd (1948) 76 CLR 431 at 444).
The point is illustrated in Steele v Australian Gaslight Co (1962) 80 WN (NSW) 503, where Sugerman and Manning JJ said (at 506):
“The compensation is to be measured by the disability that is due to the injury sustained, and that compensation is to be turned into a money value according to the state of the normal market at that time without taking into account abnormal and ephemeral conditions.” (emphasis added)
The reference to “normal market” is a reference to the normal labour market available to the worker.
As the High Court held (at 338) in Wicks, total incapacity exists “when capacity for earning has gone except for the chance of obtaining special employment of an unusual kind”. If that is so, the disablement is regarded as total unless and until the employer can show that special employment is available in the open labour market.
Lawarra must be read in the light of these authorities and it is perfectly consistent with them. Mahoney P said that the assessment of a capacity “for work” must have regard to the “realities of the labour market in which he [or she] is engaged”. The labour market referred to is the open labour market and, when considering a worker’s ability to work, “special employment of an unusual kind”, is excluded unless it can be shown that such employment is available in the open labour market accessible to the worker. Bi-Lo has not demonstrated that part-time suitable duties with a buddy was or is available to Ms Burns in the open labour market.
In assessing the worker’s ability to earn in the open labour market, the Arbitrator correctly applied Lawarra. As was stated in that case, the court (and now the Commission) will not ordinarily be concerned to determine what a worker could do “in an artificial or theoretical situation”. The “exercise is a more practical exercise” that involves the “assessment of a capacity ‘for work’ having regard to the realities of the labour market in which he [or she] is to be engaged”.
These principles were applied by Mason P (Beazley JA and Grove AJA agreeing) in Moran Health Care Services v Woods [1997] NSWSC 147; 14 NSWCCR 499 (Moran), where his Honour held (at 503G) that the “eye of the needle” test does not represent a correct approach to the concept of “total incapacity”.
The Court of Appeal again considered this issue in O’Brien Glass Industries Pty Ltd v Bahmad [2001] NSWCA 224. In that case, the worker was a glazier who suffered musculoligamentous strains to his back, neck, and arms, as well as bilateral epicondylitis, bilateral carpal tunnel irritation, and an aggravation of degenerative changes in his back and neck as a result of an incident at work on 12 June 1998. He continued to do his normal job, including overtime, until 12 August 1998, when he was retrenched for reasons unrelated to his injury or incapacity. There was no evidence of a change in his incapacity at that time. After he stopped work, he did some unpaid work and small jobs as a glazier, but was otherwise unemployed. Save for Dr Mahony, who said the worker was unfit for work, all other medical experts certified him unfit for strenuous work involving repetitive movements of the hands or static loading. Relying on Moran, the trial judge found the worker to be totally unfit from 12 August 1998.
In dismissing the employer’s appeal, Hodgson JA (Powell and Beazley JJA agreeing) said (at [28]):
“The case of Moran referred to by the primary judge establishes that the question of total incapacity is to be assessed having regard to the realities of the labour market. In my opinion also, this is an area where the expertise of the Compensation Court as a specialist tribunal is particularly relevant.”
The work Ms Burns did with Coles with a buddy was “artificial” and/or “special employment” provided as part of a rehabilitation program pursuant to the employer’s obligations under the work injury management provisions of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). Her wage while doing that work provided prima facie evidence of her ability to earn. However, once she ceased earning, the Arbitrator was required to determine if she had any capacity for work in the open labour market (Lawarra and Steggles). If not, she was entitled to an award for total incapacity.

Bi-Lo’s submission that Ms Burns was not required to look for work on the open labour market and that the “relevant labour market” included the labour market with the pre-injury employer misses the point. In many cases, a worker’s post-injury employment and earnings will be a relevant factor in determining his or her ability to earn. However, it will not be conclusive and each case will depend on its own facts. In a case such as the present, where the worker was only able to perform suitable duties with the aid of a permanent buddy, as part of a rehabilitation program (and even then with great difficulty), and where that employment is not available in the open labour market, such special employment is not part of the relevant labour market.
The facts in Steggles are instructive. In that case, the worker was partially incapacitated as a result of a repetitive strain injury. The employer offered her a job as a gatekeeper at the same wage as her pre-injury duties. The worker refused that offer. The employer submitted that the judge was bound to find that the worker was able to earn as much after the injury (in the gatekeeper job) as she probably would have been earning if uninjured. The trial judge rejected that argument and made an award for partial incapacity.
The employer unsuccessfully repeated the same argument on appeal. The worker argued that the words “is able to earn” in s 11(1)(a) of the Workers’ Compensation Act 1926 (the 1926 Act), which is in substantially the same terms as s 40 of the 1987 Act, referred to an amount the worker could command because of the worker’s own capacities in some suitable employment and not to an amount an employer was willing to pay, not simply because of the worker’s capacity but influenced by such considerations as are involved in s 11(2) of the 1926 Act (695G). The Court of Appeal accepted the worker’s submission (697F) and held that the question was whether the injury had lessened the worker’s capacity to earn “in the open labour market”.
In Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25; 4 NSWCCR 138 (Novello), the worker was a miner in Broken Hill. After his injury, he was employed in a store operated by the respondent employer and was unable to return to work in the mines. He resigned to conduct his own business, which was unsuccessful. He returned to Broken Hill and unsuccessfully sought suitable employment from his former employer. He then obtained work with the Water Board at a wage lower than he had been paid as a storeman with his pre-injury employer. The trial judge made an award for the worker based on the difference between the wage as a storeman and his wage as a miner. The worker successfully appealed.
Applying Steggles, the Court of Appeal (Kirby ACJ, Hope AP and Clarke JA agreeing) held that s 11(1) of the 1926 Act first directs attention to what a worker “is earning” and then, if the worker is not earning, to what he or she is “able to earn” by his or her own ability as a worker in the general labour market, not taking into account amounts he might be paid for other reasons. By applying the amount the worker had earned as a storeman with the respondent employer, which was “a special or particular market place” (36B), the trial judge applied the wrong criteria.

The principles in Steggles have been consistently applied in the Commission (Ranvet Pty Ltd v Vasilevski [2008] NSWWCCPD 81).
Mr Barnes submitted (at AT5.28–6.2) that Steggles could be distinguished:
“Because it was not an offer of a job at the pre-injury wage. What was considered by Coles – the Coles Group in this case – was in fact part of a rehabilitation program which formed the basis of the Applicant workers [sic] undertaking 24 to 25 hours a week with the Respondent. And upon that basis the Applicant gave clear evidence that at one particular time she was asked to do 30 minutes without a buddy and virtually recoiled at that proposition. But she gave evidence that she ‑‑
DEPUTY PRESIDENT: No, no it’s worse than that. She tried to do that and be compensated [sic, decompensated] as I understand the evidence. She didn’t recoil at the proposition, she couldn’t do it.
MR BARNES: She couldn’t do it that’s correct yeah. She was unable to do it. She was completely stressed by the whole notion of having to do that on her own.
DEPUTY PRESIDENT: Right.
MR BARNES: I concede that and succinctly put, it formed part of the evidence on transcript, that she was totally stressed by the whole notion of doing that. But the framework of the process in terms of both keeping her at work and earning an income was to allow her to work with the buddy system and in order to not just rehabilitate her from I suppose a commercial sense but also from a practical psychological sense to get her back into the workforce and to undertake some meaningful tasks which were remunerative. Upon that proposition we say it’s distinguishable from the Steggles case.”
This submission provides no valid ground for distinguishing the principles discussed in Steggles (or Novello). It confirms that the suitable employment performed by Ms Burns was special employment that was part of a rehabilitation program. While Steggles and Novello both dealt with claims for compensation for partial incapacity, the principle that, once a worker has ceased earning, his or her ability to earn must be assessed on the open labour market is applicable to claims for partial incapacity and to claims for total incapacity.
Even if, contrary to the authorities, the special employment with Coles is part of the open labour market, the Arbitrator’s finding of total incapacity was open to him and discloses no error.
In determining a worker’s capacity to earn in the open labour market, there is a need to consider more than just the medical evidence (Guthrie v Spence [2009] NSWCA 369 (Spence) at [196]–[197] Campbell JA, Basten JA and Handley AJA agreeing, citing Ric Developments Pty Ltd (t/as Lane Cove Poolmart) v Muir [2008] NSWCA 155; 71 NSWLR 593 at 598 at [22]). The Arbitrator was right to consider the evidence from Ms Burns, which he accepted. Her evidence was that:
(a)     by August 2009, she found it difficult to bring herself to go to work and it was very hard on her (T25.31);
(b)     she would go home very stressed and worry about it all night (T25.33);
(c)     she felt horrible about working by herself and could not physically do it any more (T25.44);
(d)     she was starting to shake at times (at work) (the worker’s statement at [8]);

(e)     she was really frightened to go to work (the worker’s statement at [8]);
(f)      she would not talk to any customers or other staff that she did not know (the worker’s statement at [8]);
(g)     she felt fearful when she was working, even with someone alongside her (the worker’s statement at [15]), and
(h)     her fears dramatically increased and she was tearful and frightened when her buddy left her, even for short periods inside the store, thinking that she was going to be the subject of a further assault (the worker’s statement at [15]).

The above evidence was consistent with the worker’s presentation to Ms Cross and Ms Ritchie, and Dr Walker. Ms Asbury also corroborated significant parts of the worker’s evidence. She said that Ms Burns was tearful after a medical appointment and if a customer approached her to ask where an item was. She agreed that Ms Burns was dependent on a buddy. While Dr Walker was concerned that Ms Burns had become dependent on a buddy, his opinion that she could not work “without the buddy system”, together with the worker’s evidence of her continuing difficulties with the work and bringing herself to go to work, provides strong support for the Arbitrator’s conclusion that Ms Burns was and is totally unfit for work.
That Dr Loeve and Dr Walker considered Ms Burns fit for suitable duties is not determinative. A finding of incapacity, and the extent of that incapacity, is a matter for the Commission. It requires the application of legal principles to the facts and a consideration of more than just the medical evidence (Spence). While Dr Loeve’s latest certificates certified Ms Burns fit for suitable duties for 20 hours per week with the “buddy system”, the absence of a report detailing the continuing problems Ms Burns had at work and going to work reduces the weight to be attached to his certificates. Dr Walker recommended in May 2010 that Dr Loeve consider issuing a final certificate for permanently modified duties excluding her from working at Coles. This reflects the difficulty Ms Burns had in continuing to work on the rehabilitation program with Coles and supports the finding of total incapacity.
I do not accept that the Arbitrator misinterpreted and misdirected himself as to Dr Clark’s evidence. Dr Clark’s assessment of Ms Burns as “Class 4” under “employability” was an assessment of a severe impairment where the person cannot work more than one or two days at a time, less than 20 hours per fortnight with reduced pace and erratic attendance. In practical terms, no job fits that description and it supports the finding of total incapacity.
I do not accept the submission that Ms Burns had worked on a graded return to work with no evidence of significant regression or setback. The evidence is that, while on the rehabilitation program, she experienced several major problems. These included being frightened and tearful and panicking if left alone. The evidence from Bi-Lo that the worker’s productivity had dropped and that she had stopped making eye contact with Mr Freeman (see [25] above) strongly suggests a deterioration in her condition. This evidence confirms the worker’s evidence that she found it difficult to go to work and that the work was hard on her. That is not the evidence of a successful graded return to work program and it supports the Arbitrator’s conclusion of total incapacity.
I agree that the Arbitrator’s statement (at [41]) that the worker said she “did not feel she could cope with her work even with the aid of having a buddy” was not completely accurate. Her evidence in chief was that, since stopping work, she did not feel she could go back and do the work alone (T25.49). However, that was in the context that she did not want to feel the way she felt when she had been left alone. In cross-examination, she agreed with Mr Barnes (at T27.26-38) that she could return to suitable duties with a buddy, but added a significant qualification (at T28.14-17), that it took her a long time to get used to the buddy she had at Coles (Ms Horne), starting from two hours, so she would have to “feel safe with somebody” and have somebody she trusted with her constantly. When pressed on whether, if those conditions were provided, she would be able to go back to 24 hours of suitable duties, she agreed she could, but added (at T28.24):
“Um, depending on how I felt with this new person that they were going to give me, I don’t think I would be able to work if they just threw me in for six hours for the first day with somebody that I didn’t know.”
The Arbitrator’s error, if it was an error, is of no consequence because the heavy qualification to the worker’s answers justifies a finding of total incapacity. Ms Burns was clearly not coping with the rehabilitation program. Even with a buddy she knew (Ms Horne), she found it difficult to go to work, was very stressed and would worry all night, felt frightened to go to work and was fearful at work. She could not cope when her buddy left her for just a few minutes. It follows that the worker’s heavily qualified concession in cross-examination that she could work for 24 hours per week with a buddy on a rehabilitation program does not support Bi-Lo’s position.
I agree that the Arbitrator misdirected himself where he said (at [37]) that indefinite work with a buddy was “hardly a commercial arrangement”. Whether it was a commercial arrangement or not was not the question. However, that error is of no consequence to the result because he ultimately applied the correct test when he concluded (at [40]) that Ms Burns was incapacitated for any work, having regard to the realities of the labour market. Those realities meant that, even working with a buddy as part of a rehabilitation program, Ms Burns would, at times, be on her own and that caused her great distress and anxiety.
The Arbitrator’s reference (at [39]) to Ms Burns having been totally unfit even before she stopped work in August 2009 was neither bizarre nor illogical. It should be seen as a reference to the significant difficulties Ms Burns had in continuing the rehabilitation program, that the work was difficult for her and was making her stressed and worried, and that, therefore, she was totally unfit, regardless of the principles in Steggles. That finding was open to him and discloses no error.

CONCLUSION

The Arbitrator’s general approach and conclusions were correct. His inaccurate summary (at [41]) of the worker’s evidence is of no consequence. He correctly applied Lawarra to determine that Ms Burns was and is totally incapacitated “having regard to the realities of the labour market for which she was to be engaged”. That market was the open labour market without regard to the special employment Ms Burns performed as part of her rehabilitation program. Even if, contrary to the authorities, the open labour market included the special employment at Coles, the finding of total incapacity was open and discloses no error. The result is consistent with the evidence and the authorities.

DECISION

The Arbitrator’s determination of 21 April 2011 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs, assessed at $2,200 plus GST.

Bill Roche

Deputy President
6 September 2011

I, PENELOPE FLEMING, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE