Broken Hill Associated Smelters Pty Ltd v Ian Anthony Gray No. SCGRG 91/2042 Judgment No. 3877 Number of Pages 8 Workers' Compensation

[1993] SASC 3877

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA LEGOE(1), MATHESON(2) AND DUGGAN(3) JJ

CWDS
Workers' compensation - assessment and amount of compensation - weekly earnings - respondent suffered back injury and was forced to stop work - respondent's application for payment of weekly maintenance accepted by appellant employer - dispute as to the amount of overtime to be paid to the respondent in this maintenance payment - appeal from Workers Compensation Appeal tribunal - whether the Tribunal's interpretation of sections 3 and 4 of the Workers Compensation and Rehabilitation Act was correct.
Workers Compensation and Rehabilitation Act 1986, Broken Hill v Fowler
(1979) 23 SASR 149; Francese v City of Adelaide (1989) 51 SASR 522 and Blatch v Archer (1774) 98 ER 969, applied.

HRNG ADELAIDE, 4 February 1993 #DATE 25:3:1993
Counsel for appellant:         Mr F I Di Fazio
Solicitors for appellant:     Lawson Downs
Counsel for respondent:        Mr A C Collett
Solicitors for respondent:     Johnston Withers

ORDER
Appeal dismissed.

JUDGE1 LEGOE J This is an employer's appeal from the Workers Compensation Appeal Tribunal. The appellant claims that the tribunal erred in law in interpreting and applying section 4 sub-section (1) and the definition of "prescribed allowance" in section 3 and section 4(8) of the Workers Rehabilitation and Compensation Act 1986 (hereafter called "The Act"). THE BACKGROUND FACTS
2. The respondent commenced working as a labourer for the appellant in July 1977. In 1983 and thereafter he worked as a rigger. In his evidence before the Review Officer the respondent described that work as - "A rigger does things other people don't want to do because its too heavy, too hard, too high or too dangerous." He said he had worked overtime while employed as a rigger, He worked overtime whenever he was asked to do so. This occurred about three times a week - "There was lots of it." Everyone had their choice to work overtime or not - "And we worked on a roster that was strictly adhered to and if you didn't want to work that night, well, it went on to the next guy so no-one got up to a certain amount of overtime and they said, 'Right, that's enough, give Joe Blow a go.' If he couldn't accept it or didn't want to accept it, that was it" - 3. In addition to accepting overtime on the roster he said -
    "Often we had call-ins - it could be in the middle of the night;
    mostly on weekends - where the security of the smelters would
    ring up and say 'Such and such a thing has broken down. Do you
    want to work?' and "Yea or nay'. They weren't organised -
    they'd have breakdowns and a fair bit of our overtime on
    weekends was breakdowns. There was lots of them." 4. In 1985 the respondent commenced studying for a Bachelor of Business by correspondence. This involved many hours of study and preparation for and the taking of examinations. The respondent continued these studies until October 1987. As counsel said in opening the case before the Review Officer:-
    "...as a result of that, (he) knocked back many hours of
    overtime that was available to him due to assignment commitments
    and exams. Then he goes on stating that the exams tended to
    coincide with slag fumer surveys, which was a regular,
    six-monthly programme of work which did involve a lot of
    overtime which had he not been on holidays studying for exams -
    would have greatly increased his overtime for the year." 5. This was repeated in substantially similar terms in a letter sent to the appellant which was incorporated in the transcript before the Review Officer (see pages 173, 173A and 174 of the Appeal Book). The only additional fact in the letter of January 1990 was the fact that the respondent's wife gave birth to their first child in August 1988 which would have "influenced me to accept more overtime in an effort to offset the large decrease in disposable income." In my judgment this was not a change from the opening in the case put by the respondent to the Review Officer as suggested by counsel for the appellant. These facts were accepted and restated by the Review officer in the determination made on 23rd November, 1990. 6. In January 1988, some 3 months after the respondent ceased studies, he commenced work on the crucible furnace rebuilding. 7. On the 7th January 1988 he injured his lower back. He continued his normal duties with the aid of medication until 9th March, 1988. The work on the crucible was completed on 1st February 1988. On the 9th March 1988 the respondent was forced to stop work as a result of his injuries. The respondent's application for payment of weekly maintenance was accepted. However, the dispute that has remained is as to the amount of overtime to be paid to the respondent. 8. The appellant made a number of determinations of overtime to be included in the respondent's entitlement to weekly maintenance payments. The first determination was made on 22nd December 1988, the second on 17th April 1989, the third on 28th November 1989 and finally the fourth on 2nd January 1990. The respondent's application for review of the determination gave as his reasons - "I have lost my overtime payments ..." 9. The appellant has never disputed that the respondent had done overtime on a regular basis. The issue has only been on the total number of overtime hours. The appellant claims that some items of overtime do not fall within a "prescribed allowance" received by the worker from the employer in accordance with section 3 of the Act. Section 3 contains a definition of "prescribed allowance" including:- "(c) other than amounts paid in respect of overtime worked in accordance with a regular and established pattern." In 1992 this subsection was further amended by adding the words "by way of overtime" at the beginning of (c) above. The respondent contended that the work he did by way of overtime was in accordance with a regular and established pattern, and therefore should not be disregarded under section 4(8) of the Act which stated:- "For the purposes of determining the average weekly earnings of a worker any prescribed allowance shall be disregarded." THE PROCEEDINGS BEFORE THE REVIEW OFFICER
10. Agreement was reached between the parties that the total overtime worked by the respondent in the preceding twelve months was 1288.2 hours. The appellant also conceded that the respondent was entitled to a further 60.3 hours on wharf overtime. There were five areas of dispute determined by the Review officer. Three of these were disallowed and it is the second which is the subject of this appeal:- "2. Hours that the worker alleges he would have worked on overtime had it not been for the fact that he was engaged in studying for a Bachelor of Business degree - Hours claimed by the worker totalled 410.36 hours (79.16 hours for lost slag fumer survey overtime; 331.2 lost hours for various other overtime work)." There has never been any dispute about the number of hours. The dispute is the respondent's entitlement to the inclusion of this 410.36 hours in the determination of his overtime component of his "average weekly earnings." 11. The Review Officer rejected the respondent's claim for these hours on the following basis:-
    "2. I find that the worker is not entitled to have hours that he
    alleges he would have worked on overtime had it not been for the
    fact that he was engaged in studying for a Bachelor of Business
    Degree to be included in the calculation of his average weekly
    earnings. I find that when the worker made his choice to engage
    in a study course, he did so with the knowledge and expectation
    that the course would involve assignment work, study and
    examinations and that he may not be able to work overtime. The
    worker has himself stated in evidence that the course that he
    chose was not a B.H.A.S. sponsored course and that he was doing
    the course in his own time. Consequently, I cannot see how the
    worker could have had any expectation that he ought to have been
    entitled to the overtime he may otherwise have had worked had he
    not been studying. The worker had made his choice to study and
    if that deprived him of working overtime, he has no expectation
    or right to seek to have that "lost" overtime included in his
    average weekly earnings." THE PROCEEDINGS BEFORE THE TRIBUNAL
12. Being dissatisfied with this determination the respondent appealed to the Workers Compensation Appeal Tribunal seeking to vary the order of the Review Officer "so as to properly compute the worker's average weekly earnings." The respondent argued that the Review Officer erred in law in failing to take into account his increased availability to work overtime that was available to be worked as a result of him discontinuing out of hours study commitments in October 1987. The tribunal allowed the appeal of the respondent on this ground. The other ground of appeal argued before the tribunal was rejected, and is not now relevant. 13. The tribunal published reasons on 30th July 1991. On 16th October 1992 a Judge of this court granted leave to appeal on two amended grounds:-
    "1. (a) In that the Tribunal failed to correctly interpret the
    words 'average amount that the worker could reasonably be
    expected to have earned for a week's work if the worker had not
    been disabled'. In particular the phrase and clause, (i)
    'reasonably be expected' and (ii) 'to have earned'
    (b) In that the Tribunal failed to properly address Section 4(8)
    of the Workers Rehabilitation and Compensation Act 1986 in that
    it did not disregard a prescribed allowance as defined by
    Section 3 of the Act.
    2. (a) In that the Tribunal failed to find that overtime which
    formed part of what the respondent 'was reasonably expected to
    have earned' in the future needed to also be worked by the
    respondent in accordance with a regular and established
    pattern." 14. At the hearing of this appeal counsel applied to add a third ground of appeal:-
    "3. The Tribunal erred, in law, in finding that the respondent
    would have been offered, during the period of his disability:
    (i) 1 night overtime per week to a total of 331.2 hours in
    addition to the overtime that he had worked prior to his
    disability,
    (ii) overtime on the slag fumer survey amounting to 79.16 hours,
    and
    (iii) overtime hours in excess of overtime hours actually worked
    by the respondent in the period week ending 4 March 1987 to week
    ending 16 March 1988, in that there was no evidence to support
    that finding." 15. In reasons for decision the tribunal recited the background, the five issues tested by the Review Officer, the agreed hours of overtime involved and the relevant provisions in the Act - section 4(1), (2) and (8) and section 3 'prescribed allowance' including (c) thereof. The tribunal correctly directed itself on the basis of the 'dominant principle'; see Broken Hill v Fowler
(1979) 23 SASR 149 at 155 - 156 per White J, which in the context of the 1986 Act they stated to be:- "...the reckoning of the amount the worker could reasonably be expected to have earned for a week's work during the period of disability." 16. The context of overtime was taken from the reasons of the learned Chief Justice in Francese v City of Adelaide (1989) 51 SASR 522 at 526. An important part of that passage in this appeal is where the Chief Justice said:- "The emphasis is upon estimating what the worker could reasonably have expected to earn during the period of disability. Average weekly earnings during the previous 12 months are merely taken into account as part of the process of estimation." (my emphasis). 17. Having cited from Francese's case the tribunal then said:-
    "It is important at this stage to make reference to a submission
    made by Mr. Downs. His contention, (Appeal Transcript p. 40),
    was that without the existence, pre-incapacity, of a regular and
    established pattern of overtime actually worked by the worker,
    there can be no inclusion of the overtime in the reckoning. In
    other words, if the worker has no actual history of working the
    requisite type of overtime, if that type of overtime exists in
    the workplace after the incapacity has occurred and, but for the
    accident, the worker would probably have worked it, he is still
    not qualified to have it included in the reckoning. We do not
    think that can be right. Take the hypothetical case of a worker
    injured on the first day of a job where regular and established
    patterns of overtime form part of the specification. How could
    it be said the intent of the legislation was that that worker
    should be denied the overtime component. That to us would
    offend the dominant principle. Not only that, it would not
    satisfy a fair average reckoning referred to in section (4) (2)
    (b) (ii). We do not believe this was the intention of the
    learned Chief Justice in Francese's Case. Rather, we think that
    if the evidence shows that on the probability the worker would
    have worked the overtime and it accorded with the description of
    regular and established pattern, then it must be included in the
    reckoning." 18. The tribunal then turned to the submissions put on behalf of the respondent as to the 410.36 hours which the respondent claimed should be added to the reckoning. The tribunal accepted the argument put on behalf of the respondent on this aspect and said:-
    "It appears the Review Officer has misunderstood or misapplied
    the evidence as to the study. It should not have been
    considered as a bar to him taking overtime as he was no longer
    engaged in it. He had not engaged in study from October 1987 to
    the commencement of his incapacity in March 1988. The worker
    says this would have made him available to take more overtime.
    That by itself does not demonstrate he would have worked more
    overtime nor does it determine the calculation of the amount he
    could reasonably be expected to have earned for a week's work if
    not disabled. However, though the evidence is not altogether
    clear, it was obviously the worker's case that he would have
    worked the overtime that, in the study period, he would have
    been prevented from working. The Review Officer's decision
    acknowledges that this was the worker's contention, (see
    decision p.4). That contention was not challenged in the
    cross-examination of the worker and there was no reference to
    his past conduct and work practices to contradict it. We think
    it fair to regard the respondent as likely possessed of any
    material or evidence that might throw doubt on this contention." 19. Having accepted the respondent's willingness the tribunal added "it was still for the worker to demonstrate what work would have been offered." 20. The tribunal then reviewed the evidence on the work (overtime) that would have been offered. The tribunal referred to the evidence on the slag fumer survey and the "extra night per week during the sixteen week semester and the two week exams period" based on the estimations. The tribunal commented on this evidence as follows:-
    "While the best evidence would have been an examination of the
    roster to determine the actual experience, this avenue does not
    appear to have been pursued by either party, for whatever
    reason. However this worker was experienced with the roster
    system and his estimate of the extra nights that would have been
    offered to him, in the absence of more objective sources, is at
    least some evidence to warrant a finding as to the increased
    offers that would have been made to him. ...While Mr Downs was
    able to demonstrate, that it was the roster and not the worker's
    willingness that determined the offers of work, this again did
    not disqualify the worker's estimate of the frequency with which
    he would have obtained offers, if one excludes his study
    commitment." (My emphasis). 21. The tribunal concluded that given the state of the evidence and the apparent misappreciation of the situation by the Review officer as to the effect of ceasing study, the tribunal concluded that the respondent's appeal to take the 410.36 hours into account in reckoning the average weekly wage should be allowed. GROUNDS 1 AND 2 22. Counsel for the appellant submitted that the tribunal erred in its interpretation of sections 3 and 4 of the Act. He stressed that the dominant principle in section 4 is the 'actuality' of wage received by a worker during the 12 month pre-incapacity period. The starting point for estimating the average earnings is the actual weekly earnings (section 4(2)(b) of the Act). 23. Section 4 subsection (2) provides a sort of formula to work out the average weekly earnings of the worker; see Francese v City of Adelaide (1989) 51 SASR 522 at 529. On that same page I emphasised that section 4(2)(b) of the Act not only provides what shall "be taken into account", but more particularly that the "actual weekly earnings of the worker over a period of up to 12 months before the relevant date, may be taken into account." When agreeing with the reasons of the learned Chief Justice as to the overtime components of those earnings, I added that "It is to be observed those overtime payments differ throughout" the relevant 12 month period. 24. The argument put by the appellant on grounds 1 and 2 in this appeal was not raised in Francese's case. It was submitted in this appeal that the legislation (in section 4(2) of the Act) "intended the actuality to be the test, if not the only guide to what is going to happen in the future" i.e. during the period when the injured worker is entitled to the weekly maintenance payments including overtime done "with a regular and established pattern." It was suggested that the respondent's proof of such overtime during the period when he was studying or doing examinations was totally subjective and could not be evidence of any such pattern. It was submitted that the respondent should have presented evidence of:- "Comparable earnings, or as in this case, a comparable overtime hours being worked by others in similar work." 25. It was put that this is the proper interpretation to be given to the subsection in order to achieve fairness to the employer. Counsel suggested situations where the subjective expectations of workers as to the overtime that could have been worked would lead to unsatisfactory and possibly absurd situations. For example if a worker's wife stopped her employment to have a baby, and the worker gave evidence that overtime was available at that time which he could have done. Such evidence it was suggested would be "unavailable." 26. I would reject this submission. Section 4(2)(b)(i) uses the word "may" for the purpose of what is to be taken into account, in determining the average weekly earnings as does section 4(2)(b)(ii). Subsection (2)(b)(i) provides one possible formula to be applied - actual weekly earnings over a period of up to 12 months. No doubt the majority of the respondent's overtime from March 1987 till March 1988 fell under this actual category. Subsection
(2)(b)(ii) provides another possible formula to be applied during either a short period of time during which the worker has been employed i.e. a period short of 12 months and even down to a very short period; or where "for any other reason it is not possible to arrive at a fair average. ..." Although the tribunal did not expressly emphasise this alternative basis for estimating the overtime I agree with the tribunal when they said:- "It is not as though the assessor is contained to considering a period of twelve months before the relevant date." 27. It appears the tribunal were directing their attention in that part of their reasons to subsection (b)(ii) and the 'dominant principle.' But I also agree when the tribunal added:-
    "In other words, it is not as though the two methods referred
    to in (i) (earnings over the period of twelve months before the

    relevant date) and (ii) (reference to the average weekly
    earnings by other persons in an equivalent situation), are the
    only legitimate methods of assessment. In both cases the word
    'may' is used by the legislature. At the end of the day the
    task is to work out what the worker could reasonably be expected
    to have earned." (My emphasis). This statement is clearly consistent with the judgment of King CJ in Francese supra. 28. I would merely add in this case there is yet another method of assessment, namely when for some other reason it is not possible to arrive at a fair average. In those circumstances the assessor of the facts may use the evidence which establishes a regular pattern worked by the worker and other employees in a similar situation. Here the fact of a roster was in existence, the fact that overtime was plentiful, the fact that overtime was available on weekends sometimes without any real notice to the employee particularly one employed as a rigger was clearly proved and accepted by the assessor of the facts. But the particular facts accepted by the tribunal were that each employee and each rigger had a different pattern of overtime worked. This respondent's pattern of overtime was different to other riggers and certainly other employees. 29. In my judgment the tribunal correctly interpreted both sections 3 ('prescribed allowance' in (c) thereof) and 4(2) and (8) of the Act. For these same reasons ground 2 of the Notice of Appeal should be rejected. PROPOSED GROUND 3 30. As to the proposed ground 3 of the appeal I have come to the conclusion that there was some evidence to substantiate the claim for the 410.36 hours overtime for the purpose of reckoning the average weekly earnings over the 12 month period. I accept the Tribunal's views and comments on this aspect of the case, in particular that the appellant's witnesses did not show the respondent's evidence to be erroneous. After all it was within the knowledge and ability of the appellant to produce direct evidence from its records to demonstrate that the respondent's evidence was erroneous. The appellant chose not to do so. The principle of Blatch v. Archer (1774) 1 Cowp 63 at 65; 98 ER
969 has some application in these circumstances. Lord Mansfield said:- "It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted." See also Howe and Another v Jones (1953) SASR 82 at 86 and Backler and Others v Forbes (1957) SASR 298 at 302. 31. For these reasons I am of the opinion that the concession my brother Duggan J extracted from counsel for the appellant is correct, namely, if there was some evidence the proposed ground 3 of the appeal does not raise a matter of law. Leave should not be granted to add this ground as it does not raise a question of law, but merely a conclusion made by the tribunal as to the proof of relevant facts, cf Ortlepp v Le Cornu Furniture Centre unreported decision of the Full Court delivered on 12th April 1991 per Olsson J's judgment No. 2813.1 at page 4. 32. In my opinion the appeal should be dismissed.

JUDGE2 MATHESON J I agree that this appeal should be dismissed for the reasons given by Legoe J.

JUDGE3 DUGGAN J I agree that this appeal should be dismissed for the reasons given by Legoe J.