Breust, C. v Commission for the Safety, Rehabilitation & Compensation of Commonwealth Employees

[1991] FCA 308

Re: CHARLES BREUST
And: THE COMMISSION FOR THE SAFETY REHABILITATION AND COMPENSATION OF
COMMONWEALTH EMPLOYEES
No. G743 of 1990
FED No. 308
Workers' Compensation
101 ALR 1
30 FCR 40/13 AAR 399

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Beaumont(2) and O'Connor(2) JJ.

CATCHWORDS

Workers' Compensation - Full-time employee of the Commonwealth - also part-time member of Army Reserve - injury occurring in full-time employment - whether Army Reserve earnings to be taken into account in assessing compensation.

Commonwealth Employees' Rehabilitation and Compensation Act 1988, ss. 5(2); 8(1), 8(2), 8(3); 14(1); 19(2)

HEARING

SYDNEY

#DATE 7:6:1991

Counsel and Solicitors Mr G.T. Johnson instructed by for
Applicant: Werry Altobelli

Counsel and Solicitors Mr R. Driver with Mr G. Giagios
for respondent: Giagios instructed by Australian

Government Solicitor

ORDER

Appeal dismissed.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") constituted by the Honourable Justice P.J. Moss. The issue before the Tribunal was whether, in the calculation under s.8 of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth) ("the Act") of the normal weekly earnings of the applicant, Mr Charles Breust, there should be taken into account not merely Mr Breust's pre-injury earnings at the Australian Taxation Office, of which he was a full-time and permanent officer, but also his earnings as a member of the Defence Force Reserve, a part-time post.

1. In this appeal, Mr G.T. Johnson, counsel for Mr Breust, submitted that the pre-injury earnings as a member of the Defence Force Reserve were to be taken into account under s.8(1) or 8(3) of the Act. Mr Johnson's submissions were supported by Mr R. Driver, with whom Mr G. Giagios appeared for the respondent, The Commission for the Safety Rehabilitation and Compensation of Commonwealth Employees ("the Commission"). Mr Driver supported Mr Johnson, at least as to the effect of s.8(3) of the Act, and he put no arguments against the allowance of the appeal. However, Mr Driver did not consent to the allowance of the appeal.

2. Mr Breust had suffered a disease, "cognitive deficit related to job stress and severe neurodermatitis", arising out of his employment as an officer of the Australian Taxation Office and, having regard to the definitions in s.4(1) of "disease" and "injury", the Commission was liable under s.14(1) of the Act to pay compensation in accordance with the Act. As Mr Breust's disease had occasioned incapacity to work, Mr Breust was entitled to compensation in accordance with s.19 of the Act. What was in issue was whether, in the calculation of Mr Breust's "normal weekly earnings", a term defined in s.8 of the Act, Mr Breust's former earnings as a member of the Defence Force Reserve were to be taken into account.

3. Mr Driver conceded that, because of the terms of s.5 of the Act, a person who is a member of the Defence Force Reserve is deemed to be employed by the Commonwealth. I accept that concession without examining it for myself. However, I would point out that the provisions of s.5(2) of the Act detract from, rather than support, the submission that the Act is concerned with the totality of an employee's employment or employments with the Commonwealth rather than with the employee's individual employment or employments with the Commonwealth. Section 5(2) specifies, in relation to the employments there mentioned, that such an employee "shall, for the purposes of this Act, be taken to be employed by the Commonwealth, and a person's employment shall, for those purposes, be taken to be constituted by the person's performance of duties as such a member of the Australian Federal Police or member of the Defence Force or the duties of that office, as the case may be." This subsection contemplates that employment as a member of the Defence Force will be looked at as a separate employment by the Commonwealth.

4. In this appeal, we are not concerned with the issues considered in Palese v Ciba-Geigy Australia Ltd (1973) 1 NSWLR 146 in which it was held, partly because s.14(1)(b) of the Workers' Compensation Act 1926 (NSW) provided that earnings from concurrent contracts of service with two or more weekly employers were to be brought to account in the computation of "average weekly earnings", that s.11(1)(a) of the New South Wales Act brought to account actual and probable earnings from all contracts of employment including moneys the employee probably would have earned in a second employment which, at the time of the injury, he held concurrently with that in which he received injury. To like effect was Hill v Bryant (1974) 2 NSWLR 423 in which Moffitt P. at 426 and Glass J.A. at 428 pointed out that the word "employment" as used in section 11 of the New South Wales Act referred to occupation, not service with the same employer. Similar considerations no doubt apply to expressions in s.19 of the Act such as "where the employee is employed", "earn in suitable employment" and "an offer of suitable employment". In the present appeal, we are concerned solely with the meaning of "normal weekly earnings" as defined in s.8.

5. The whole of s.8 should be considered for the purpose of ascertaining the meaning of words used in the section. However, for the purpose of brevity, I set out only the following provisions:-
   

"(1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula: (NH x RP) + A

where:

NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;

RP is the employee's average hourly ordinary time rate of pay during that period; and

A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.

...

(3) Where an employee was, at the date of the injury, employed by the Commonwealth in part-time employment, temporary employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth.

...

(10) If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:

(a) where the employee continues to be employed by the Commonwealth - the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or

(b) where the employee has ceased to be employed by the Commonwealth - whichever is the greater of the following amounts:

(i) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth in the employment in which he or she was engaged at the date of inquiry;

(ii) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth in the employment in which he or she was engaged at the date on which the employment by the Commonwealth ceased;

the amount so calculated shall be reduced by the amount of the excess."

1. The question is whether, when the section uses terms such as "his or her employment" and "that employment", it refers to the employment out of which or in the course of which the injury or disease arose or was incurred or to all employments in which the employee was engaged, or possibly all employments with the Commonwealth in which the employee was engaged.

2. Mr Johnson submitted that s.8 is not concerned with the question of liability, that the use of the singular word "employment" encompassed the plural, having regard to s.23(b) of the Acts Interpretation Act 1901 (Cth) and that the Act should be read beneficially to favour injured employees.

3. However, s.8 is drafted so as to leave no doubt that the references in s.8(1) to "his or her employment" and "that employment" are references to the employment out of which or in the course of which the injury or disease arose or was incurred. This is because the section does not refer to earnings generally but to the number of hours worked each week in an employment, to the employee's average hourly ordinary time rate, to the average amount of allowances payable "in respect of his or her employment" and to "the relevant period", a term defined in s.9. All these provisions show that s.8 is not concerned with earnings generally. From this, I deduce that the term "employment" has the limited meaning of "the relevant employment", the meaning which the Tribunal gave to it.

4. This interpretation is confirmed by s.8(3). This provision distinguishes between part-time employment with the Commonwealth, and "any other employment". The sub-section provides that, where the liability to pay compensation arose out of part-time employment with the Commonwealth, then any other earnings of the employee shall be treated as earnings of the employee from his or her employment. Mr Johnson and Mr Driver submitted that the term "part-time employment" does not reflect the employment giving rise to the liability. However, it does so for it adds to the earnings from that employment the employee's earnings from any other employment. It does not have the effect, for which counsel seemed to contend, of adding to the earnings from full-time employment by the Commonwealth earnings from any part-time employment with the Commonwealth which the employee also had. The provision distinguishes between the part-time employment and "any other employment", and it is the earnings from the latter that are to be included.

5. Similarly, when s.8(8) refers to "the employment of an employee" and to the circumstance that "the employee is not receiving earnings from any other employment", it is referring to the employment which founds the liability to pay compensation and distinguishes that from other employment.

6. This interpretation also accords with s.8(10). It would be a strange result if an employee who had been in full-time employment with the Commonwealth and who had had to give up that full-time employment because of his incapacity were to be treated as being still in employment by the Commonwealth, for the purposes of the sub-section, simply because he remained on the establishment of the Defence Force Reserve.

7. The interpretation accords, moreover, with what was said in the second reading speeches to which reference was made in the course of argument. Those speeches make it clear that "An employee's normal weekly earnings will be based on his pre-injury salary". I take this to be a statement that, in the case of a full-time employee who suffered injury or disease attributable to his employment, his normal weekly earnings are to be based upon his salary from that employment, not upon his earnings from all employments or occupations in which he may at the time have engaged.

8. The principal argument against the interpretation is based on the use by s.8 in several instances of the expression "employment by the Commonwealth". However, the expression seems to me to be neutral in its operation.

9. It follows that, in the case of an officer holding a full-time position with the Commonwealth, who suffers injury or disease arising out of or in the course of that employment, his normal weekly earnings are to be calculated by reference to the incidents of that employment alone. It is only in the case of an employee who suffers injury or disease arising out of or in the course of part-time employment that normal weekly earnings will take account of earnings from other employment. And in that case, the other employment will take account of earnings from any other employment, whether it be employment with the Commonwealth or outside Commonwealth employment. I reject counsels' submissions that the Act intends to compensate an injured employee for all earnings or all earnings from the Commonwealth which may be lost. It seems to me that s.8 provides to the contrary, save in the case where the injury or disease was related to part-time employment.

10. In my view, the Tribunal correctly interpreted the Act.

11. I would dismiss the appeal but, as counsel for the Commission argued in support of the allowance of the appeal, I would do so without awarding costs.

JUDGE2

Charles Breust, the applicant, appeals to the Court, on a question of law under s.44 of the Administrative Appeals Tribunal Act 1975, from a decision of the Tribunal affirming a decision of the Commission that the applicant's earnings as a member of the Australian Army Reserve were not to be taken into account in calculating the compensation payable under the Commonwealth Employees' Rehabilitation and Compensation Act 1988. In order to understand the question of law, one of construction of the Act, which arises for decision, it is necessary to refer to the history of the matter as follows.

1. The applicant has been employed by the Australian Taxation Office, as an office supervisor, for many years. On 16 August 1988, he lodged a claim for compensation under the Compensation (Commonwealth Employees') Act 1971. In December 1988, the Commonwealth Employees' Rehabilitation and Compensation Act ("the Act") became fully operative. In February 1989, liability for the applicant's claim was accepted by the Commission "for cognitive deficit related to job stress and severe neurodermatitis". Certain weekly payments of workers' compensation were made to the applicant in respect of his claim, as from February 1988. Apart from his employment as a permanent and full-time employee of the Taxation Office, the applicant was a member of the Army Reserve, having the rank of Major. He was given leave to engage in this activity pursuant to s.72 of the Public Service Act 1922. He ceased active Army service in December 1988. In May 1989, the applicant was certified unfit to continue his duties in the Army Reserve as a result of the same disability which, it is accepted, prevented him from carrying out his normal duties with the Taxation Office. The applicant is presently on disability leave from that Office. He has resigned from the Army Reserve. The applicant contends that, in ascertaining the amount of workers' compensation to which he is entitled pursuant to the Act, his earnings as a member of the Army Reserve should be taken into account.
   The legislative scheme

2. So far as presently material, the scheme of the Act is as follows. The Commission is liable to pay compensation in respect of an "injury" suffered by an "employee" if the injury results in incapacity for work (s.14(1)). "Injury" is defined so as to include a disease (s.4(1)). An "employee" is defined to include a person employed by the Commonwealth (s.5(1)). Without limiting the generality of s.5(1), a member of the Defence Force shall be taken to be employed by the Commonwealth (s.5(2)). The Commission is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount calculated under the formula:
   

"N W E - A E

where:

NWE is the amount of the employee's normal weekly earnings; and

AE is the amount per week (if any) that the employee is able to earn in suitable employment."

(s.19(2)).

1. Normal weekly earnings before an injury shall be calculated in relation to "the relevant period" under the formula -
   

"(NH X RP) + A

where:

NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period; RP is the employee's average hourly ordinary time rate of pay during that period; and A is the average amount of any allowance payable to the employee in each week, in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment."

(s.8(1)).

1. "(T)he relevant period" is a reference to the latest period of two weeks before the date of the injury during which the employee was continuously employed by the Commonwealth (s.9(1)).

2. Where an employee is required to work overtime on a regular basis, the normal weekly earnings are calculated by reference to another formula the detail of which is not presently material (s.8(2)).

3. Where an employee was, at the date of the injury, employed by the Commonwealth in part-time employment, temporary employment or unpaid employment, any earnings of the employee from any other employment are, for the purposes of the section, treated as earnings of the employee from his or her employment by the Commonwealth (s.8(3)).

4. Where, because of the shortness of the relevant period, the normal weekly earnings calculated in accordance with s.8(1) or (2) would not fairly represent the weekly rate at which the employee was being paid, those earnings are calculated as the Commission considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate (s.8(5)).

5. If the amount of the normal weekly earnings of an employee before an injury would, where the employee continues to be employed by the Commonwealth, exceed the amount per week that the employee would receive if he or she were not incapacitated for work the amount so calculated shall be reduced by the amount of the excess (s.8(10)(a)).
   The reasoning of the Tribunal

6. Before the Tribunal, reliance was placed, for the applicant, upon the reference to the Defence Force in s.5(2). It was said that the applicant was to be regarded, in his capacity as a member of the Army Reserve, as a part-time employee of the Commonwealth within the meaning of s.8(3). Alternatively, the applicant's employer in both capacities was the Commonwealth and the applicant was entitled to have both incomes brought into the assessment of "normal weekly earnings". The Tribunal rejected the submission saying that it:
   

"...overlooks the clear intention of the Act...first, that the employment to which a relevant injury applies is the employment in which the employee was engaged in when the injury happened. Second, compensation payable in respect of a relevant injury is designed, at least in the first forty-five weeks following the injury, to provide the injured employee with the same amount of earnings that he or she would have continued to earn in the relevant employment if the injury had not happened. Thus the various provisions of s.8...are designed to meet different contingencies so as to bring about the end result that ensures, as fairly as possible, that those incapacitated as a result of the injury, will continue to receive as near as possible their pre-injury earnings in respect of their relevant employment. To ensure that the operation of these provisions does not bring about a situation where the injured employee would receive in excess of his pre-injury earnings, provision is made in sub-section (10) for any excessive amount to be reduced."

The applicant's grounds of appeal

1. Before us, the following arguments were advanced on behalf of the applicant: (1) The Act is beneficial legislation and should be construed so as to give the fullest relief which the fair meaning of its language will allow (see, e.g., Secretary, Department of Social Security v Cooper (1990) 94 ALR 301 at 306). (2) The Act reveals no intention to confine the "employment" of an applicant, for the purposes of s.8(1), (2) and (5), to the particular employment which contributed to his or her incapacitating disease. "Employment", as that word is used in s.8(1), (2) and (5) includes any employment by the Commonwealth and, if, as here, an applicant has two employment relationships with the Commonwealth during the "relevant period" (contemplated by s.8(1), or extended by s.8(5)), both relationships should be regarded as "employment" within the contemplation of these provisions. By virtue of s.23(b) of the Acts Interpretation Act 1901, the singular may include the plural, i.e. more than one employment may be taken into account. (3) Particularly in view of s.8(3), it would be anomalous if the applicant's Army Reserve employment was regarded as irrelevant for the purpose of calculating his Normal Weekly Earnings. On any view, s.8(3) would operate to include the Taxation Office earnings of the applicant amongst those to be taken into account for the purpose of calculating his Normal Weekly Earnings if he suffered incapacity as a result of injury arising out of or in the course of his Army Reserve employment or if that employment contributed to a disease resulting in incapacity. (4) Although "employment" is not defined in the Act, where used in s.8(1), (2) and (5), it means all "employment by the Commonwealth", not just the particular employment in which injury occurred. This is consistent with the definition of "employee" in s.4 and 5, particularly s.5(1) and (2)(b). It is also consistent with the overall scheme of s.8. Section 8(3) operates to include "other employment" in the calculation of a part-time Commonwealth employee's Normal Weekly Earnings by deeming the earnings of the employee from such "other employment" to be "earnings of the employee from his or her employment by the Commonwealth". This suggests that the meaning of "employment" in s.8(1), (2) and (5) is simply "employment by the Commonwealth". Section 8(4), (5), (6), (8) and (10) also assume that "employment", as used in s.8(1), (2) and (5), means "employment by the Commonwealth", rather than the particular employment in which injury occurred. (5) The inclusion of the applicant's Army Reserve employment earnings in the calculation of his Normal Weekly Earnings is consistent with the interpretation of s.11(1) of the Workers' Compensation Act 1926 (N.S.W.) (see Palese v Ciba Geigy Aust. Ltd. (1973) 1 NSWLR 146; Hill v Bryant (1974) 2 NSWLR 423). (6) For the applicant to gain the benefit of s.8(3), it is necessary only for him to have been a member of the Army Reserve on the date of injury. It is not necessary for his Army Reserve employment to have been the employment which contributed to his disease. The word "only" does not occur in s.8(3) of the Act as it did in s.25(3) of the Compensation (Commonwealth Employees') Act 1971.
   Did the Tribunal err in its interpretation of the Act?

2. The Commission's liability to pay compensation is imposed by s.14(1) in respect of an "injury" as defined in s.4(1), that is, relevantly, a disease arising out of, or in the course of, the employee's employment. In the present case, the relevant employment was the applicant's employment with the Taxation Office. The amount of the compensation payable weekly to the applicant is fixed by the formula set out in s.19(2), that is, NWE - AE, being normal weekly earnings less the amount per week (if any) that the applicant is able to earn in suitable employment. The notion of "normal weekly earnings" is defined by s.8(1). This is apparently directed to the situation where overtime is not worked on a regular basis. In that event, the formula in s.8(2) is applicable. As has been noted, it is provided by s.8(3) that where an employee was, at the date of the injury, employed by the Commonwealth in part-time, temporary or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of s.8, be treated as earnings from employment by the Commonwealth.

3. In our opinion, s.8(3) has no application to the present case. Here, the applicant had full-time employment with the Commonwealth and pursuant to leave of absence, served in the Defence Forces. Section 8(3), in our view, is directed to the different situation where an employee is injured in the course of part-time, temporary or unpaid employment with the Commonwealth and has earnings from other employment. The subject of s.8(3) is a part-time, temporary or unpaid employee of the Commonwealth who is injured in the course of that employment. The applicant did not qualify under this provision. It may have been different, and it is not necessary now to decide the point, if the applicant had been injured in the course of his Defence Forces employment (see Re Byard and Commonwealth of Australia (1983) 5 ALN No. 121).

4. In our view, the decisions on the New South Wales statute do not assist here. The structure and language of that legislation may be distinguished for our purposes. Cases arising under the Workmen's Compensation Act 1906 (U.K.) (see Brandy v Owners of S.S. Raphael (1910) 1 KB 376 discussed by Williams J. in Attorney-General for New South Wales v Perpetual Trustee Company (Ltd) (1952) 85 CLR 237 at 268), may be distinguished for similar reasons. Central to the applicant's argument is his construction of s.8(3). But, as has been said, we cannot accept that he falls within its provisions on any ordinary reading of their language. The provisions speak of a part-time, temporary or unpaid employee of the Commonwealth upon the implicit, if not explicit, assumption that he or she has suffered an injury in the course of that employment. The position of the applicant cannot be characterised in this way. He suffered his "injury" in the course of his full-time employment with the Commonwealth. The opening words of s.8(3) did not apply to him. It follows, in our view, that the Tribunal correctly rejected his application for review.
   Result of the appeal

5. We would dismiss the application. Since the Commission sought to support the application, we would make no order as to the costs of the application.