Central Coast Community Care Association v Swanson
[2005] NSWWCCPD 103
•5 September 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Central Coast Community Care Association v Swanson [2005] NSW WCC PD 103
APPELLANT: Central Coast Community Care Association
RESPONDENT: Deborah Swanson
INSURER:GIO TMF Workers Compensation
FILE NUMBER: WCC3454 -04
DATE OF ARBITRATOR’S DECISION: 19 July 2004
DATE OF APPEAL DECISION: 5 September 2005
SUBJECT MATTER OF DECISION: Section 42(1) Workers Compensation Act 1987, and current weekly wage rate.
PRESIDENTIAL MEMBER: Acting Deputy President Mary Walker
HEARING:Determined on the papers
REPRESENTATION: Appellant: Rankin Nathan Lawyers
Respondent: McClelland Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 19 July 2004 is revoked and the following decision is made in its place.
That the Appellant Employer pay the Respondent Worker weekly compensation at the rate of:
1.$183.78 from 16 January 2003 to 18 March 2003 under section 36 of the Workers Compensation Act 1987.
2.$183.78 from 19 March 2003 to 27 October 2003 under section 40 of the Workers Compensation Act 1987.
3.$183.78 from 28 October 2003 to 17 February 2004 under section 36 of the Workers Compensation Act 1987.
4.$183.78 from 18 February 2004 to date and continuing under section 37 of the Workers Compensation Act 1987.
The Respondent is allowed a credit for any payment made for the relevant period/s.
The Appellant Employer is to pay the Respondent Worker’s costs of the proceedings before the Arbitrator as agreed or assessed.
The Appellant Employer is to pay the Respondent Worker’s costs of appeal as agreed or assessed.
BACKGROUND TO THE APPEAL
On 16 August 2004 Central Coast Community Care Association (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 19 July 2004. The Respondent to the Appeal is Deborah Swanson (‘the Respondent Worker’).
The Respondent Worker commenced employment with the Appellant Employer on 16 March 2001, initially as a casual, and from 29 December 2001 as a permanent part-time employee.
As at the time of the arbitration hearing, held on 29 June 2004, the Appellant Employer had paid the Respondent Worker compensation in the sum of $97.18 per week for all periods of incapacity.
The Respondent Worker alleges that she suffered injuries to her left knee, right ankle and lower back on 30 November 2002 during the course of her employment as a Care Service Employee Grade 2 pursuant to the Charitable, Aged, Disability Care Services (State) Award.
The Respondent Worker alleges she continued to work in the same capacity until 16 January 2003 when she became incapacitated for her work due to her injuries.
The Respondent Worker claims that she was totally incapacitated for work during the period from 16 January 2003 to 18 March 2003 and partially incapacitated during the period of 19 March 2003 to the date of her resignation, effective 28 October 2003 (letter of resignation from Respondent Worker dated 21 October 2003) and from that date the Respondent Worker has been totally incapacitated.
The Respondent Worker claims compensation for a period of total incapacity for work from 16 January 2003 until 18 March 2003 (transcript page 1.40).
The Respondent Worker claims compensation with respect to her partial incapacity between 19 March 2003 and 27 October 2003 (transcript page 1.40).
The Respondent Worker thereafter claims compensation for total incapacity from 28 October 2003 to date and continuing (transcript at page 1.40).
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 19 July 2004 records the Arbitrator’s orders as follows:
“That the Respondent pay the Applicant weekly compensation at the rate of:
$198.60 from 16 January 2003 to 18 March 2003 under s 36 of the Workers Compensation Act 1987.
$198.60 from 19 March 2003 to 28 October 2003 under s 40 of the Workers Compensation Act 1987.
$198.60 from 28 October 2003 to 17 February 2004 under s 36 of the Workers Compensation Act 1987.
$198.60 from 18 February 2004 to date and continuing under s 37 of the Workers Compensation Act 1987.
The Respondent is allowed a credit for any payment made for the relevant period/s.
That the Respondent pay the Applicant costs as agreed or assessed.”
ISSUES IN DISPUTE
The issue in dispute in this appeal is that the Appellant Employer alleges that the Arbitrator erred in determining the Respondent Worker’s relevant wage rate within the meaning of section 42 of the 1987 Act.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘1998 Act’) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
In submissions filed in this appeal on behalf of the Appellant dated 16 August 2004 (at paragraph 3, page 1) and on behalf of the Respondent dated 20 August 2004 (paragraph 1, page 1) the parties consented to this matter being determined on the papers.
Having regard to the consent of the parties, Practice Directions Numbers 1 and 6 and the documents that are before me, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
There is no dispute that the monetary threshold requirements of section 352(2) are met.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
ROLE AND FUNCTION OF A PRESIDENTIAL MEMBER
A Presidential Member has a specific and limited role in the review of a decision of an Arbitrator. The role was described in Australian Tramship System (Cagill Meat Processes Pty Ltd) v Ramage [2004] NSWWCC PD 31 per Dr Gabriel Fleming, Deputy President as follows:
“The review is not a rehearing. The Presidential Member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2002) 203 CLR 172). Alternatively the Presidential Member may remit the matter back to the Arbitrator concerned, or to another arbitrator for determination in accordance with any decision or directions made.”
SUBMISSIONS
A transcript of the proceedings is available of the oral submissions made before the Arbitrator on 29 June 2004. The transcript has been considered in this appeal.
The Appellant Employer argues that the Arbitrator erred in determining the Respondent Worker’s relevant wage rates within the meaning of section 42 of the 1987 Act.
The Appellant Employer submits that the Arbitrator erred in entering an Award which reflected an incorrect rate of weekly compensation to be paid by the Appellant Employer to the Respondent Worker.
The Appellant Employer contends that the Arbitrator erred for the following reasons (in summary):-
(1) The Arbitrator incorrectly calculated the Respondent Worker’s current weekly wage rate to be the average number of hours worked per week multiplied by $13.24 per hour which was the Respondent Worker’s base hourly rate prior to the injury.
(2) Section 42(1)(a) of the Workers Compensation Act 1987 (‘the 1987 Act’) requires a worker’s current weekly wage rate to be calculated by reference to the rate of remuneration under the relevant award for one week in respect of the work being performed by the worker immediately before being incapacitated.
(3) The Arbitrator incorrectly calculated an average number of hours worked.
(4) The only period the Arbitrator should have reference to when calculating the number of hours worked by the Respondent Worker prior to the injury were the hours worked by the Respondent Worker for the one week immediately before being incapacitated as set out in section 42(1)(a) of the 1987 Act.
(5) The correct calculation is based on the fact that one week immediately before the Respondent was incapacitated was the period from 12 January 2003 to 15 January 2003 although weekly compensation was first paid to the Respondent Worker during the two week period from 25 December 2002 to 7 January 2003. The Respondent Worker’s first period of incapacity occurred during the period 25 December 2002 to 7 January 2003. Therefore one week before 25 December 2002 is the period to which the Arbitrator should have looked in order to properly calculate the Respondent Worker’s current weekly wage rate in accordance with section 42(1)(a) of the 1987 Act.
(6) The correct calculation is based on the following:
(a)The pay period immediately prior to the period 25 December 2002 to 7 January 2003 was the period 11 December 2002 to 24 December 2002. The Respondent Worker is paid on a fortnightly basis. During this latter period, the Respondent Worker actually worked 14.67 hours for the two week period however this 14.67 hours is not broken down into separate weeks on the Appellant Employer’s wage sheets. Without knowing at this point in time what hours the Worker actually worked for the one week period prior to 25 December 2002, the Appellant Employer submits that it can only be 7.34 hours (i.e. if for the two week period between 11 December 2002 and 24 December 2002 the Respondent Worker was paid for 14.67 hours and during each week the Worker has to work at least her contract hours of 7.34 hours per week then the Worker must have worked 7.34 hours per week for the one week immediately before being incapacitated – 14.67 divided by 2).
(b)In light of the above, the Appellant Employer submits that the Arbitrator incorrectly calculated the Respondent Worker’s current weekly wage rate with reference to section 42(1)(a) of the Act. At paragraph 33 of the Statement of Reasons for Decision, the Arbitrator should not have had reference to the average number of hours worked by the Respondent Worker prior to the injury but instead, pursuant to section 42(1)(a) of the Act should have only had reference to the one week of the Respondent Worker’s work performed immediately before being incapacitated. For this one week immediately before the Respondent Worker was incapacitated, the Respondent Worker only worked her minimum contracted hours of 7.34 hours. 7.34 hours x $13.24 = $97.18 gross per week which is what the Worker has been paid by the Appellant Employer’s Insurer for all periods in dispute and for all periods to date in which the Arbitrator has made a determination (less any payments made by the employer for work actually performed).
The Respondent Worker submits that the appeal should be dismissed on the following bases (in summary):
(1) It was accepted by the parties before the Arbitrator that prior to her injury the Respondent Worker worked in excess of fifteen hours per week. The Respondent Worker relies upon paragraph 33 of the Arbitrator’s Statement of Reasons for Decision.
(2) The Respondent Worker was paid by the Appellant Employer an amount of $97.18 gross per week in respect of all relevant periods of incapacity, such amount being calculated on the basis of the Respondent Worker’s original contracted hours of employment rather than actual hours worked.
(3) The Commission should have regard to the rate of remuneration immediately before the Respondent Worker was incapacitated. The rate of remuneration is that for a period of one week pursuant to the applicable award. The Respondent Worker relies upon paragraphs 19 and 20 of the Arbitrator’s Statement of Reasons for Decision.
(4) No error of law has been demonstrated by the Arbitrator referring to the terms ‘average number of hours’, in the context of determining the actual number of hours worked by the Respondent Worker immediately prior to her incapacity.
(5) The conclusions of the Arbitrator were sound, based on the evidence before the Commission.
(6) It was open to the Arbitrator to find on the basis of the evidence before the Commission that the actual number of hours worked by the Respondent Worker immediately before being incapacitated were fifteen hours per week.
(7) The Arbitrator did not err in her calculation of the current weekly wage rate as the Arbitrator held (at paragraph 31 of the Statement of Reasons) that the Respondent Worker’s ‘current weekly wage rate’ is the rate of remuneration prescribed by the Award i.e. $13.24 per hour multiplied by the number of hours actually worked. Implicit in the Arbitrator’s findings is that the actual hours immediately prior to incapacity were found to be equivalent to what was described as the average number of hours worked being fifteen hours per week.
(8) The Appellant Employer in paragraph 7 of the Grounds of Appeal requests the Arbitrator to speculate.
(9) Alternatively, if the Commission is of the view that section 42(1)(a) requires the Commission to look at the Respondent Worker’s remuneration for one week immediately prior to being incapacitated, the Commission should have regard to the fortnight commencing 8 January 2003 to 21 January 2003 as the Respondent Worker’s incapacity commenced on 16 January 2003. One week prior to the incapacity, the calculation in respect of the hours worked by the Applicant during that week (the Applicant worked 27.76 hours during the fortnight), this equating to 13.88 hours for the week immediately prior to the Applicant’ incapacity.
EVIDENCE
The evidence and submissions that were before the Arbitrator are also before me on the appeal. I have taken into account the written submissions on the appeal and the parties’ oral submissions made at the hearing on 29 June 2004.
The following exhibits were tendered in the proceedings before the Arbitrator without objection as described in the transcript (at page 2):
Exhibit 1 - Part B of the Charitable, Aged and Disability Care Services (State) Award.
Exhibit 2 -Clause 7(vii) of the Charitable, Aged and Disability Care Services (State) Award.
The evidence filed in the Commission and relied upon by the parties and before the Arbitrator is also before me in this appeal. I particularly note the following evidence which has been included in this appeal:
(1) The Respondent Worker’s wage records for the period from 14 March 2001 to 10 June 2003 (handwritten);
(2) Payroll Audit Report dated 23 December 2003 for the Respondent Worker for the period from 26 June 2002 to 24 June2003 (6 pages) signed by J. Steer, 24 December 2003;
(3) Letter dated 23 September 2003 from McClellands Lawyers to Central Coast Community Centre;
(4) Statement of Deborah Swanson (undated);
(5) GIO Employee’s Compensation Claim form dated 9 January 2003;
(6) Statement of Witness to an Injury, Samantha Hallier, dated 10 January 2003;
(7) Reports of Dr Michael Hunter, two dated 13 February 2003, 21 May 2003 and 10 July 2003;
(8) Letter dated 13 August 2003 from Mr Barry Bracken to McClellands Lawyers;
(9) Wage records 7 March 2001 to 25 May 2003 (handwritten);
(10) WorkCover NSW medical certificates dated 6 January 2004, 8 January 2003, 16 January 2003, 21 January 2003, 29 January 2003, 21 February 2003, 3 March 2003, 24 March 2003, 1 April 2003, 11 April 2003, 29 April 2003, 9 May 2003 and 10 June 2003;
(11) Analysis of Payments made from 5 March 2004 to 2 June 2004;
(12) Letter dated 1 April 2004 from Central Coast Community Care to Mr Doubleday;
(13) Letter of resignation from the Respondent Worker dated 21 October 2003;
(14) Duty Statement – Care Service Employee Grade II from Central Coast Community Care;
(15) Applications for leave dated 6 April 2002, 13 May 2002, 24 June 2002, 27 June 2002, 28 June 2002 and 30 September 2002;
(16) Medical Certificates 26 July 2002, 20 August 2002, 26 June 2003, 7 July 2003 and 9 July 2003;
(17) Payroll Y-T-D Run Report for the period 1 July 2001 to 30 June 2002;
(18) Analysis of Payments made for claim number P004419F from 30 November 2002 to 4 March 2004;
(19) Applicant’s Supplementary Statement (undated);
(20) PAYG Payment Summaries – Individual Non-business for years ending 30 June 2001 and 30 June 2002;
(21) Notice of Assessment for year ended 30 June 2002, and
(22) Payslips for period from 28 May 2003 to 28 October 2003.
DISCUSSION AND FINDINGS
Section 42 of the 1987 Act – Determination of the Worker’s Current Weekly Wage Rate
The central issue on appeal is the determination of the applicable ‘current weekly wage rate’ pursuant to section 42 of the 1987 Act.
Section 42 of the 1987 Act provides:
“42 Current weekly wage rate
(1)Subject to this section, a reference in this Division to the current weekly wage rate of a worker, being a worker who is incapacitated for work and who, immediately before being incapacitated:
(a)was remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period (not being a worker who belongs to a class of workers prescribed by the regulations for the purposes of paragraph (c))—is, at any time during the incapacity, a reference to the rate of remuneration under that award at that time for 1 week in respect of the work being performed by the worker immediately before being incapacitated, ….
(6)In determining a worker’s current weekly wage rate in accordance with subsection (1) (a) or (b) or (4), any amount paid or payable to the worker:
(a) in respect of shift work, overtime or other penalty rates,
(b)under the terms of the worker’s employment in excess of the ordinary rate fixed by any award for the work performed by the worker, or
(c) to cover special expenses incurred by the worker because of the nature of the worker’s employment,
is, except in so far as the regulations otherwise provide, to be disregarded….
(8)In this section:
appropriate period, for the purposes of the calculation of “average weekly earnings” in relation to a worker, means the period of 12 months or, if the worker has been employed with the employer concerned for less than 12 months at the time of the injury, that lesser period.
average weekly earnings, in relation to a worker, means the average weekly earnings of the worker determined in accordance with section 43 during the appropriate period before whichever of the following times produces the higher average weekly earnings:
(a) the time of the injury concerned,
(b)the time at which the relevant weekly payment of compensation is due,
with the determination under paragraph (b) made on the assumption that the worker had been earning the wage or salary which the worker would probably have been earning if the worker had remained uninjured and continued to be employed in the same or some comparable employment.
award means:
(a) an award in force under the Industrial Arbitration Act 1940 or an award or industrial agreement, within the meaning of the Conciliation and Arbitration Act 1904 of the Commonwealth, that is in force,
(b)an industrial agreement or enterprise agreement in force under the Industrial Arbitration Act 1940 or the Industrial Relations Act 1991,
(c)an agreement made under the Public Service Act 1979 or an agreement with respect to wages or salaries entered into under the provisions of any other Act by an employer constituted by that other Act with any association or organisation representing any group or class of employees, or
(d)an award made by the Coal Industry Tribunal under the Coal Industry Act 1946,
(e) (without limiting the above) includes a State industrial instrument,
and includes any such award, industrial agreement or other agreement or instrument as from time to time amended.
prescribed proportion means 80 per cent or, if the regulations prescribe some other percentage for the purposes of this section, that other percentage.”
In interpreting the provisions of section 42 of the 1987 Act I agree with the Arbitrator’s views and findings noted below.
At page 4 of the Arbitrator’s Statement of Reasons for Decision dated 19 July 2004:
Paragraph 29: “Central to s 42(1)(a) is the meaning of the phrase ‘of work being performed by the worker’. That phrase could be interpreted in at least two ways. It could mean the type of work performed (or Award classification), in this case, Care Service Employee Grade 2. It could also mean the amount of work ‘being performed by the worker’. Section 33 of the Interpretation Act 1987 provides that in the interpretation of a provision of an Act, a construction consistent with the object of the legislation shall be preferred. If the former interpretation is correct the 1987 Act would provide no guidance on how to calculate the ‘current weekly wage rate’ for part time employees whose hours of work vary from week to week. This in my opinion would be inconsistent with the objects of the legislation. Accordingly in my view the phrase ‘work being performed by the worker’ embraces both the hours and the type of work”;
Paragraph 30: “I do not accept the argument put for the Respondent that the phrase ‘rate of remuneration’ should be read down to mean the rate payable for 7.34 hours. The words ‘being performed by the worker’ bears no relationship to the concept of guaranteed contract hours but rather in my view plainly refers to the rate payable for work performed”; and
Paragraph 31: “In my opinion the Applicant’s ‘current weekly wage rate’ is the rate of remuneration prescribed by the Award i.e. $13.24 per hour multiplied by the number of hours actually worked”.
At pages 3 and 4 of the Arbitrator’s Statement of Reasons for Decision dated 19 July 2004:
Paragraph 14: “The key issue in dispute between the parties is the basis for calculating weekly compensation payable to the Applicant. It is common ground that for the first 26 weeks of total incapacity compensation was payable to the Applicant at the ‘current weekly wage rate’ as defined by section 42(1)(a). What is in issue is how that provision ought to be applied to the facts of this case”;
Paragraph 17: “The first issue to be resolved is whether, as asserted by the Respondent, any or all time worked by the Applicant in excess of 7.34 [hours] per week falls within the scope of s 42(6)(i) [sic]. This requires an examination of the relevant provisions of the Award and the Applicant’s contract of employment. Neither party was able to locate a copy of the Applicant’s contract, however it is not in issue that it described her as a permanent part time employee and guaranteed the Applicant a minimum of 14.67 hours of employment per fortnight (7.34 [hours] per week). There is nothing before me to indicate that it was a term of the contract that those hours would be worked on any particular day/s of the week. An examination of the wage records tendered by the Respondent indicates that the Applicant worked both weekdays and weekends”;
Paragraph 18: “The terms shift work, overtime or other penalty rates are not defined by the 1987 Act”;
Paragraph 19: “… Clause 11(i) of the Award defines a ‘permanent part-time employee’ to be one who is ‘permanently appointed … to work for a specified number of hours, which are less than those prescribed for a full-time employee’. Clause 11(iii) provides that such employees shall be paid an hourly rate calculated on the basis of one thirty-eighth of the appropriate rate prescribed by the award for full time employees. Clause 7(vii) provides that the ordinary hours of work for a permanent part-time employee will be a specified number of hours, which are less than those prescribed for a full-time employee”;
Paragraph 20: “Clause 10(v) provides that all time worked by permanent part-time employees in excess of 11 hours (or the rostered daily ordinary hours of work prescribed for the majority of full-time employees) shall be paid at overtime rates but time worked up to that amount is not regarded as overtimes ‘but an extension of the contract hours for that day and shall be paid at ordinary pay.’ It is common ground that the Applicant was paid at the base rate of $13.24 per hour for any work in addition to her contracted hours except when such work fell on weekends or exceeded 11 hours per day”;
Paragraph 21: “Clause 15 deals with shift allowances and penalty rates. It prescribes a range of penalties for work undertaken on shifts that commence after 10:30am ((cl 15(i)) and weekend work (cl 15(iii))”;
Paragraph 22: “A ‘shift worker’ is defined by cl 2 of the Award as ‘an employee who is not a day worker’. A day worker is defined as ‘an employee who works their ordinary hours from Monday to Friday inclusive and who commences work on such days at or after 6:00a.m. and at or before 10:30a.m., otherwise than as part of a shift system’. Neither party addressed whether the Applicant was a day worker for the purpose of the Award”;
Paragraph 23: “Clause 15(ii) provides that part time workers are only entitled to the additional rates prescribed for full time employees (cl 15(i)) where their shifts commence prior to 6:00am or finish after 7:00pm”;
Paragraph 24: “… The issue to be determined is: were the hours worked by the Applicant in excess of 7.34 hours per week paid or were payable as ‘shift worker, overtime or penalty rates’”;
Paragraph 25: “While the Award provides that ordinary hours of work of a permanent part time employee will be a ‘specified number of hours’, in this case 7.34 hours, it is apparent that hours worked in excess of that are not treated as overtime except as provided for by Clause 10(v)”;
Paragraph 26: “All weekend work undertaken by the Applicant attracted penalty payments as prescribed by cl 15(iii). In my view s 42(6)(i) [sic] does not require work undertaken on the weekend to be disregarded, merely the penalty rates it attracts. It is noted that on the information available it would have to be open to the Respondent to require the Applicant to work her prescribed hours on the weekend, provided of course that appropriate penalty payment was made”;
Paragraph 27: “It is not clear from the evidence whether the Applicant worked at times which attracted shift payments as per cl 15(ii) of the Award. In any event, in my view for the purpose of section 42(6)(i) [sic] such work is to be treated in the same manner as weekend work, that is, the loading is to be disregarded, not the work itself”; and
Paragraph 28: “In summary the only payments made or payable to the Applicant to be disregarded for the purpose of s 42(6)(i) [sic] are those payable under cl 15(iii) of the award (weekend penalties), cl 15(ii) (shift loadings) and overtime in excess of 11 hours per day or ordinary hours prescribed for full time employees (cl 10(v))”.
Determination of ‘Current Weekly Wage Rate’
In determining the issue on appeal being the calculation of the applicable ‘current weekly wage rate’ pursuant to section 42 of the 1987 Act I find that the Arbitrator erred in law in averaging the number of hours worked and utilising an average figure of 15 hours to determine the current weekly wage rate pursuant to section 42(1)(a) of the 1987 Act. The section requires the determination of “… the rate of remuneration under that award at that time for 1 week in respect of the work being performed by the worker immediately before being incapacitated.”
The following evidence exists which allows a more precise determination:
(1) the parties having been unable to locate a copy of the contract of employment, if it exists, relied upon the provisions of the Charitable, Aged and Disability Care Services (State) Award (Award Code: 726, Serial C1154) in determining the current weekly wage rate pursuant to section 42(1)(a) of the 1987 Act particularly the applicable hourly rate;
(2) a PayRoll Audit Report dated 23 December 2003 for the Respondent Worker for the period from 26 June 2002 to 24 June 2003 (6 pages) signed by J. Steer 24 December 2003, to determine the hours actually worked by the Respondent Worker; and
(3) a WorkCover medical certificate issued by Dr Simon Chang dated 16 January 2003.
Award
For the purposes of determining the ‘current weekly wage rate’ pursuant to section 42(1)(a) of the 1987 Act, the parties agree that the Respondent Worker was employed pursuant to an award being the Charitable, Aged and Disability Care Services (State) Award and the Respondent Worker was a permanent part-time employee.
Incapacity
Section 33 of the 1987 Act allows that if a Worker is totally or partially incapacitated for work which results from an injury, the compensation payable by the employer under the 1987 Act to the injured worker shall include a weekly payment during the incapacity.
The definition of ‘incapacity’ as it applies to section 33 of the 1987 Act is contained in Ball v WilliamHunt & Sons Ltd [1912] AC 496; (1912) 5 BWCC 459 at 462 per Lord Loreburn:
“In the ordinary and popular meaning . . . I think there is incapacity for work when a man has a physical defect which makes his labour unsaleable in any market reasonably accessible to him, and there is partial incapacity for work when such a defect makes his labour saleable for less than it would otherwise fetch.”
This definition was affirmed in Ward v Corrimal-Balgownie Collieries Ltd (1938) 61 CLR 120 at 129 per Latham CJ and Williams v Metropolitan Coal Co. Ltd (1948) 76 CLR 431 at 440 per Latham CJ and at 449 per Dixon J. See also State Rail Authority v Belgrove [1982] 2 NSWLR 738; Arnott’s Snack Products Pty Ltd v Yacob (1985) 155 CLR 171; 57 ALR 229. The meaning of ‘incapacity’ in section 42 of the 1987 Act is a reference to incapacity in a period in which the worker has an enforceable claim to a weekly payment (see Mills, Workers Compensation NSW, at 42.2). This distinction is not necessary for finding incapacity in the circumstances outlined in this appeal.
For the purpose of interpreting section 42(1)(a) I accept the finding of the Arbitrator that the Respondent Worker’s incapacity to work commenced on 16 January 2003 and I reject the Appellant Employer’s contention that the date of incapacity was 25 December 2002 for the following reasons:
(1) An analysis of the WorkCover medical certificates established the date of commencement of incapacity as 16 January 2003. Two WorkCover medical certificates were issued on 6 January 2003 and 8 January 2003 respectively by Dr George Miller which certified the Respondent Worker fit for her pre-injury duties however a WorkCover medical certificate was issued by Dr Simon Chang dated 16 January 2003 which is the first medical certificate in evidence to certify the Respondent Worker “unfit to work from 16 January 2003 to 21 January 2003” arising out of the injuries she sustained on 30 November 2002. Subsequent medical certificates exist and have been filed in the proceedings before the Commission but need not be recounted here. Additionally, a medical report prepared by Dr Barry Bracken dated 13 August 2003 notes a history provided by the Respondent Worker (at paragraph 2, page 2 of the report) which corroborates the evidence that supports the contention that the date of commencement of the Respondent Worker’s incapacity was 16 January 2003: “She said thereafter (i.e. after the injury on 30 November 2003) she continued to do her work and home duties until January 2002 …”.
(2) I regard an handwritten pay record filed with the Commission with no heading or reference relating to the Respondent Worker with a notation immediately prior to 25 December 2002: “Start of Worker’s Comp and Light Duties and Time Worked” as unclear and unreliable as to evidencing the date of commencement of the incapacity of the Respondent Worker. In my view this handwritten document is of little probative value in establishing the date of the commencement of the Respondent Worker’s incapacity. The Payroll Audit Report dated 23 December 2003 for the period from 26 June 2002 to 24 June 2003 signed by J. Steer, 24 December 2003 also filed with the Commission does not, on its face, provide assistance in construing the relevant date of incapacity.
Calculation
In construing section 42(1)(a) I accept the alternate submission made on behalf of the Respondent Worker that the correct method of calculating the weekly wage rate is to have regard to the hours of work performed by the worker in the fortnight commencing 8 January 2003 to 21 January 2003 (i.e. the pay period including the period of work performed for one week immediately prior to the Respondent Worker’s incapacity). As noted above the Respondent Worker’s incapacity commenced on 16 January 2003. The best evidence available to determine the hours worked immediately prior to the Respondent Worker’s incapacity is the evidence of the pay period of the fortnight from 8 January 2003 to 21 January 2003 as found in the Payroll Audit Report dated 23 December 2003 signed by J. Steer on 24 December 2003. This evidence provides a more appropriate method to determine the hours worked in the week immediately prior to 16 January 2003, rather than utilising an ‘average’ over an unspecified period of time which may or may not include penalty rates.
As noted above I accept the Respondent Worker’s submission that the hours worked during the week immediately prior to 16 January 2003 is calculated by determining the hours worked during the fortnight pay period of 8 January 2003 to 21 January 2003, being 27.76 hours (see PayRoll Audit Report dated 23 December 2003). To fairly determine the rate per week in the week commencing 8 January 2003 I accept the approach submitted by the Respondent Worker which is to balance out the work equally in each week of the fortnight, this equates to 13.88 hours worked by the Respondent Worker for the week immediately prior to the Respondent Worker’s incapacity.
The amount noted in the relevant Payroll Audit Report of hours worked for the period from 8 January 2003 to 21 January 2003 is 27.76 hours of which 19.34 were paid at the base rate of $13.24 per hour, 8.42 hours however were worked on Sunday with a rate of $23.17 per hour being paid. The weekend penalty rate being the additional sum above the base rate is to be deducted pursuant to section 42(6) of the 1987 Act. Therefore the current weekly wage rate is ($13.24 x 13.88 hours) $183.78.
I find that the Arbitrator erred in law in accepting $15.00 per hour as an average figure for the purposes of calculating the current weekly wage rate pursuant to section 42(1)(a) of the 1987 Act. In the absence of agreement between the parties I find that the current weekly wage rate to be applied is ($13.24 x 13.88 hours) $183.78.
Compensation
The periods of incapacity as noted below are not challenged in this appeal.
Period 1 – 16 January 2003 to 18 March 2003
Total Incapacity
It is not in dispute that the Respondent Worker was totally incapacitated for work during this period. Section 36(1) is to be applied in determining the rate of compensation to be paid to the Respondent Worker.
Section 36(1) of the 1987 Act states:
“36 Weekly payment during total incapacity—first 26 weeks
(1)The weekly payment of compensation to an injured worker in respect of any period of total incapacity for work during the first 26 weeks of incapacity shall be the amount of the worker’s current weekly wage rate.”
The current weekly wage rate to be applied in compensating the Respondent Worker during the first 26 weeks of incapacity is $183.78.
Period 2 – 19 March 2003 to 27 October 2003
Partial Incapacity
Period 2 as noted by the Arbitrator concluded on 28 October 2003 and Period 3 also commenced on 28 October 2003. This is obviously a typographical error as the letter of Registration from Ms Deborah Swanson dated 21 October 2003 contains a notation “Resignation accepted 21-10-03, J Evans, Admin Co-Ordinator”, the resignation being effective 28 October 2003. I also refer to the submission of the Respondent Worker’s representative in the Arbitration proceedings that the Respondent Worker was offered by “… the respondent (employer) a redundancy payment, and since 28 October 2003 the applicant (worker) has been totally off work …” (transcript at page 1.40). I accept for the purposes of this appeal that the Respondent Worker’s resignation was effective as of 28 October 2003.
The Arbitrator’s finding, as noted below, has not been challenged in this appeal:
“During this period the Applicant was partially incapacitated for employment and worked restricted hours, i.e. 7.34 hours per week. Section 40 provides that the weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the Worker’s weekly earnings, but is to bear such a relation to the amount of that reduction as may appear proper in the circumstances of the case.
I accept the applicant’s submission that her pre-injury work history provides a reasonable basis for determining the probable reduction of her weekly earnings throughout this period. This gives a figure of about $206 per week (i.e. $304 - $98).”
The issue as to whether the principles as enunciated in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 and Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56 have been applied in this matter has not been raised in this appeal. The pertinent issue is the calculation of the ‘weekly payment’ that would be payable to the worker if it were a period of total incapacity for work as noted in section 40(5).
Section 40(5) of the 1987 Act allows:
“40 Weekly payments during partial incapacity—general
….
(5)Maximum rate of compensation
The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity for work…”.
Section 40(5) provides that in respect of any period of partial incapacity, compensation is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity for work. Accordingly, the maximum amount payable to the Respondent Worker in this case pursuant to section 40 of the 1987 Act is $183.78 per week.
Period 3 – 28 October 2003 to 17 February 2004
Total Incapacity
The Respondent Worker resigned on 28 October 2003 and the Respondent Worker’s redundancy commenced on that day. It is common ground and not challenged in this appeal, that since that date she has been totally incapacitated for work. The rate of compensation payable to the Respondent Worker for this period pursuant to section 36 of the 1987 Act is $183.78 per week.
Period 4 – 18 February 2004 to date and continuing
Total Incapacity
Section 37 of the 1987 Act provides:
“37 Weekly payment during total incapacity—after first 26 weeks
(1)The weekly payment of compensation to an injured worker in respect of any period of total incapacity for work (not being a period during the first 26 weeks of incapacity) shall be:
(a)90 per cent of the worker’s average weekly earnings, except that:
(i) the payment shall not exceed $235.20 per week,
(ii)in the case of a worker who is over 21 years of age at the time of payment—the payment shall not be less than $187.10 per week, and
(iii)in the case of a worker whose average weekly earnings do not exceed $170 per week—the payment shall be 100 per cent of those earnings or $153, whichever is the lesser amount….
(1A)Despite subsection (1), for a maximum of 26 weeks the weekly payment of compensation to an injured worker in respect of any period of total incapacity for work (whether the period is during or after, or partly during and partly after, the first 26 weeks of incapacity) is the amount specified in section 36. This subsection applies even if the injury concerned resulted in any period of partial incapacity for work in respect of which the worker received or receives weekly payments of compensation.
(2)The total weekly payment under subsection (1) shall not exceed the worker’s current weekly wage rate determined from time to time in accordance with section 42….
Section 37 provides for any period of total incapacity beyond the first 26 weeks. The rate of compensation is 90% of the Respondent Worker’s average weekly earnings. In this matter, accepting the average weekly earnings of $304 which is not in dispute and applying the 90% requirements of section 37 of the 1987 Act the amount is $273.60 (which exceeds the requirement as set out in section 37(1) and (2)). Applying the provisions of section 37(2) of the 1987 Act the compensation payable to the Respondent Worker for this period is $183.78 per week.
DECISION
The decision of the Arbitrator dated 19 July 2004 is revoked and the decision noted below at paragraph 47 is made in its place.
That the Appellant Employer pay the Respondent Worker weekly compensation at the rate of:
1. $183.78 from 16 January 2003 to 18 March 2003 under section 36 of the Workers Compensation Act 1987.
2. $183.78 from 19 March 2003 to 27 October 2003 under section 40 of the Workers Compensation Act 1987.
3. $183.78 from 28 October 2003 to 17 February 2004 under section 36 of the Workers Compensation Act 1987.
4. $183.78 from 18 February 2004 to date and continuing under section 37 of the Workers Compensation Act 1987.
The Respondent is allowed a credit for any payment made for the relevant period/s.
The Appellant Employer is to pay the Respondent Worker’s costs of the proceedings before the Arbitrator as agreed or assessed.
COSTS ON APPEAL
Pursuant to section 345(3) of the 1998 Act:
“If an appeal concerns lump sum compensation, weekly payments of compensation or medical expenses compensation, the appellant is considered to be unsuccessful on the appeal unless the decision on appeal results in a change in favour of the appellant in the amount awarded or ordered to be paid in the decision appealed against of at least $5,000 … and (emphasis added) at least 20% of the amount awarded or ordered to be paid.”
In this appeal the award in favour of the Appellant Employer amounts to an award less than 20% of that originally awarded by the Arbitrator. Accordingly the Appellant Employer is to pay the Respondent Worker’s costs of this appeal as agreed or assessed.
Mary Walker
Acting Deputy President 5 September 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MARY WALKER ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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