Burgess and Comcare

[2007] AATA 1637

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1637

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/1664

GENERAL ADMINISTRATIVE DIVISION		)
Re		KATIE BURGESS

Applicant

And COMCARE

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date7 August 2007  

PlaceBrisbane

Decision

The Tribunal:

1.    sets aside the respondent’s decision of 3 April 2007;

2. substitutes a decision that the applicant is entitled to compensation pursuant to s 19 of the Safety, Rehabilitation and Compensation Act 1988 at the rate of $842.05 (75% of her normal weekly earnings) from 18 October 2006 to 18 January 2007;

3.    orders that the costs of these proceedings incurred by the applicant be paid by the respondent.  

..............Signed.................

Deputy President

CATCHWORDS

COMPENSATION – Commonwealth employees – compensation for incapacity – normal weekly earnings – suspension without pay – whether the amount of earning a suspended employee would receive if not incapacitated would be zero – decision set aside

Safety, Rehabilitation and Compensation Act 1988 (Cth.) - ss 8(1), 8(10), 14, 19

Acts Interpretation Act 1901 (Cth.) - s 15AA

CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273  

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297

Bortolazzo v Comcare (1997) 75 FCR 385

Commissioner of Taxation of the Commonwealth of Australia v Ryan (2000) 201 CLR 109

REASONS FOR DECISION

7 August 2007 Deputy President P E Hack SC    

1.The applicant, Ms Katie Burgess, is an employee of the Commonwealth. In September 2004 Ms Burgess suffered an injury, as that term is used in the Safety, Rehabilitation and Compensation Act 1988 (Cth.), (“the SRC Act”) in the course of that employment.

2.The respondent, Comcare, has accepted that it is liable to pay compensation to Ms Burgess in accordance with the SRC Act in respect of the injury. It has accepted that it is liable to pay her compensation in accordance with s 19 of the SRC Act because she is incapacitated for work as a result of the injury. The amount of compensation payable under s 19 of the SRC is determined by reference to an employee’s “normal weekly earnings”.

3.The calculation of normal weekly earnings is undertaken by reference to s 8 of the SRC Act, particularly s 8(1). The terms of the sub-section need not be considered. It is agreed that during the period from 18 October 2006 to 18 January 2007 Ms Burgess’s normal weekly earnings, calculated by reference to s 8(1) of the SRC Act, were $1,122.73.

4.On 18 October 2006, for reasons that are not relevant here, Ms Burgess was suspended from her employment without pay. When Comcare learned of that it reconsidered, of its own motion, the amount of Ms Burgess’s entitlements to compensation under s 19 of the SRC Act. On 3 April 2007 Comcare decided that Ms Burgess was,

“entitled to incapacity … at the rate of $0.00 from 18 October 2006 to 18 January 2007.”

5.Ms Burgess seeks a review of this decision.

6.The facts are agreed[1]. The dispute turns upon the proper interpretation of s 8(10) of the SRC Act which is relied upon by Comcare to support its decision. That sub-section provides:

[1]        See Exhibit 2.

“(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 or a licensed corporation—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 or a licensed corporation—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 or the licensed corporation in the employment in which he or she was engaged at the date of the injury;

(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 or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;

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

7.The argument for Comcare is put in this way. Ms Burgess’s normal weekly earnings in the period have been calculated as being $1,122.73. She continues to be employed by the Commonwealth, so s 8(10)(a) of the SRC Act applies to her situation. The amount per week of the earnings that she would receive if she was not incapacitated is nil because she is suspended without pay. Therefore, it is said, the normal weekly earnings exceed what she would otherwise have earned by $1,122.73 and thus the amount calculated under s 8(1), $1,122.73, is to be reduced by the excess, $1,122.73, to nil. Thus Ms Burgess’s entitlement to compensation under s 19 of the SRC Act was nil.

8.The argument of Mr Murdoch SC, who appeared for Ms Burgess, was put in the alternative:

(a)that s 8(10) of the SRC Act has no application to a situation such as the present; and,

(b)in any event, s 8(10) is not engaged where there is, on the hypothesis postulated in the subsection, no amount, no earnings and nothing received.

9.For the reasons below, I am unable to accept the argument advanced by Comcare.

10.The starting point is the recognition that a statutory provision has to be construed in its context so that it is consistent with the language and purpose of all of the provisions of the statute[2]. The passages from the earlier decision in Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation[3] relied upon by Miss Ford, are not to the contrary. Section 19 of the SRC Act (together with s 14) creates the entitlement to be paid compensation for incapacity for work. The incapacity that Ms Burgess has had accepted by Comcare remains; it has not been removed by her suspension from work. The construction contended for by Comcare treats her as being no longer entitled to receive compensation for that incapacity by reference to events that are unconnected to the injury.

[2]       CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [35]; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 271 at [11].

[3] (1981) 147 CLR 297.

11.The merit of the argument advanced by Comcare may be tested in this way. Let it be assumed that on 18 October 2006 Ms Burgess’s employment had been terminated rather than merely suspended. Miss Ford accepted that in that event Ms Burgess’s entitlements would fall to be considered under s 8(10)(b) of the SRC Act and that there would not, in such a case, be a reduction to nil of her entitlements. It seems odd, to say the least, that Ms Burgess should be in a worse position when she has been suspended pending investigation than she would have been had her employment been terminated as the result of an investigation. And the same is true if she had herself terminated the employment.

12.I do not regard s 8(10) of the SRC Act as having any operation in the present situation. Its function is to cater for the cases where, through unusual variations, the employee’s normal weekly earnings were artificially high or to prevent the employee receiving a windfall. Bortolazzo v Comcare[4] provides an illustration. There, pre-injury, the employees had been receiving shift penalties. As a consequence of a restructure by their employer, there were no longer any duties that required shift-work. The approach of the Tribunal in determining entitlements by reference to the salary without shift penalty was approved by Heerey J on the employees’ appeal to the Court. His Honour said this[5]:

“In my opinion the Tribunal was correct in its construction of s 8(10)(a). The applicants' construction would require a reading into s 8(1)(a) of something like ‘in the employment in which he or she was engaged at the date of injury’.
I accept the submission of counsel for the applicants that the Act is social legislation which ought to be construed, in the event of ambiguity, liberally in favour of injured employees: McDermot v Owners of SS Tintoretto [1911] AC 35; Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335. But a liberal interpretation is one thing, rewriting the statute is another.

Moreover, the construction for which the respondent contends is consistent with the structure and purpose of the Act. The provision of compensation is to operate from week to week: see for example, the detailed formulae in s 19. The underlying policy is that an injured employee should not be worse off during the period of incapacity as a result of work-related injury. However, it follows conversely that the injured employee should not be better off.“

[4] (1997) 75 FCR 385.

[5] 75 FCR 385 at 388.

13.I do not regard the construction for which Comcare contends to be consistent with the structure and purpose of the SRC Act. And I do not accept that Ms Burgess is “better off” as a result of her work-related injury if she were to continue receiving compensation after being suspended without pay. Rather I consider that she is being compensated for an accepted lack of capacity for employment which remains regardless of the steps taken by her employer unrelated to her incapacity.

14.I accept, as well, Mr Murdoch’s second argument as demonstrating that the subsection can have no application in a case such as the present. On the literal interpretation for which Comcare contends, s 8(10) of the SRC Act is not engaged here. As Mr Murdoch put it, there is no comparator. The paragraph requires that there be earnings of an amount that have been received. Where there are no earnings there is no amount and nothing has been received.

15.The present case has some similarity to Commissioner of Taxation v Ryan[6]. That case concerned a “nil assessment” of tax, that is, a refund notice issued by the Commissioner to the taxpayer stating that her taxable income was nil, that the tax on her taxable income was “$0.00”, and that a specified amount was the amount of refund due to her. The Commissioner had no power to amend an assessment to increase the amount of the liability after the expiration of three years “from the date on which the tax became due and payable under that assessment”. The question in issue was described as being whether “3 years from the date upon which the tax became due and payable under the assessment” elapsed. The majority answered that question in this way[7]:

“At the very least, language is strained by saying that tax becomes ‘due and payable’ on a particular date in circumstances where the Commissioner has issued a document informing the taxpayer that the Commissioner has determined that the taxpayer owes no amount for tax. No amount of teasing of the words of s 170(3), or of the words of s 204, can reduce, let alone eliminate, that strain. Whatever may be the elasticity of the expression ‘the date upon which the tax became due and payable’, it does not, and cannot, accommodate the case where no tax is due and payable. Nor do the words of s 204, when read and understood in their context, enable any such accommodation.”

[6] (2000) 201 CLR 109.

[7] 201 CLR 109 at 122, para. [15].

16.Similarly, it seems to me to strain the language of the paragraph to say that an amount of earning was received when no amount of earning was received. To paraphrase, whatever may be the elasticity of the expression “the amount per week of the earnings that the employee would receive” it does not, and cannot, accommodate the case where no amount would be received. As Heerey J observed in the extract set out in paragraph 12 above, legislation of this type is ordinarily construed, in the event of an ambiguity, liberally in favour of the injured worker.

17.In my view effect is given to the purpose of the SRC Act[8] by construing it as not having operation in a case such as the present.

[8]        Cf. Acts Interpretation Act 1901(Cth.) s 15AA.

18.I would set aside the decision under review and would substitute a decision that Ms Burgess is entitled to compensation pursuant to s 19 of the Safety, Rehabilitation and Compensation Act 1988 at the rate of $842.05 (75% of her normal weekly earnings) from 18 October 2006 to 18 January 2007. Comcare should pay Ms Burgess her costs incurred in the proceedings.   

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         .................Signed....................................................
  Eleanor O’Gorman, Associate

Date of Hearing  3 August 2007
Date of Decision  7 August 2007
Counsel for the Applicant         Mr J E Murdoch SC
Solicitors for the Applicant        Ryan Kruger Lawyers
Counsel for the Respondent     Miss E Ford
Solicitors for the Respondent    Dibbs Abbott Stillman