CFJX and Repatriation Commission (Veterans’ entitlements)

[2016] AATA 207

CFJX and Repatriation Commission (Veterans’ entitlements) [2016] AATA 207 (4 April 2016)

Division	VETERANS' APPEALS DIVISION
File Number(s)	2013/2079
Re	CFJX
APPLICANT
And	Repatriation Commission
RESPONDENT

DECISION

Tribunal	Deputy President Melick
Date	4 April 2016
Place	Hobart

The decision under review is affirmed.

........................................................................

Deputy President G Melick AO RFD SC

CATCHWORDS

DEFENCE AND WAR – veterans’ entitlements ­- ­special rate of pension under s24(1)(c) of the Veterans’ Entitlements Act 1986 (Cth) – whether Applicant alone prevented from engaging in remunerative working by war-caused injuries

LEGISLATION

Veterans Entitlements Act 1986

CASES

Smith v Repatriation Commission [2014] FCAFC 53

Repatriation Commission vButcher [2007] FCAFC 36

Beezley v Repatriation Commission [2015] FCAFC 165

Repatriation Commission vHendy [2002] FCAFC 424

Repatriation Commission v Richmond [2014] FCAFC 124; 226 FCR 2

REASONS FOR DECISION

Deputy President Melick

OVERVIEW

1. The Applicant had worked in the Hobart office of Recall Information Management Pty Ltd (Recall) since 1996 but was made redundant in August 2011 and has not worked since.

2. In 2005 the Applicant was granted a partial disability pension which was later increased to a full pension.

3. On 9 March 2012 the Applicant applied for an increase in pension rate pursuant to section 15 of the Veterans Entitlements Act 1986 (VEA).

4. The claim was made upon the basis that as a result of a war caused condition the Applicant was prevented from continuing to undertake remunerative work for at least eight hours per week after an involuntary redundancy from his place of work.

5. The claim was initially rejected by the Repatriation Commission on the 3 August 2012 where upon the Applicant sought a review of that decision.  The Veteran’s Review Board affirmed the decision upon the basis that, inter alia, the Applicant’s war caused condition did not alone prevent the Applicant from undertaking remunerative work.

6. The Applicant seeks to have that decision reviewed.

   FACTUAL BACKGROUND

7. After hearings in May and August 2015, and further submissions in February 2016, most of the areas in dispute between the Applicant and the Respondent appear to have been resolved or agreed, but unfortunately the legislative scheme is, in the words of Rares, Buchanan and Foster JJ,[1] “bedevilled with bewildering complexity”.

   [1] Smith v Repatriation Commission [2014] FCAFC 53 at [26]

8. Because of the lack of dispute on the majority of the facts, and the raising of no significant issues of credit, I find the following only referring to the evidence in any detail where I was asked to draw different inferences.

9. The Applicant was engaged in war service in South Vietnam in 1966. There was no dispute that as a result of that service the Applicant was now suffering Post Traumatic Stress Disorder (PTSD), and is now incapacitated to such an extent that he is incapable of undertaking remunerative work for more than eight hours per week.

10. The Applicant commenced working in the Hobart Office of Recall (or associated companies) in 1996 and was the Information Centre Manager of the Hobart Office at the time of ceasing work.        

11. The Applicant turned 65 on 8 March 2010.

12. In early 2007, the Applicant's work performance was assessed to be of sufficient standard to warrant a salary increase. There was no evidence to suggest poor work performance prior to mid-2007.

13. The Applicant attended a military reunion in Hobart in May 2007 and a further one in Canberra in May 2008. It was after attending these reunions that symptoms of PTSD began to manifest, commencing with the Applicant having sleeping difficulties.

14. After May 2008, the Applicant’s symptoms worsened to such an extent that it was noticeable to others. In March 2010 he had a breakdown and was prescribed the antidepressant Lexapro.

15. The Applicant’s work performance deteriorated to such an extent that he was no longer effectively performing his duties. His counsel accurately paraphrased the Applicant's evidence as follows:

    “I would come to work, shut the door, get a cup of coffee and play on the computer. Then I would get out. I get in the car and go and see a fictitious customer. I have lunch in a park or something. I go back and check all were there and were safe. I'd leave work as early as possible (between 3.00 and 5.00). I'd make sure emails attended to.

    I had no contact with my manager Witness B. I contact him if a problem arose that he needed to sign off on. I speak with Witness B fortnightly or monthly.

    Witness B was based in South Australia”.

16. The Applicant was made redundant in August 2011 and at no stage was the Applicant’s age mentioned as a relevant factor in his termination.

17. Prior to the Applicant being made redundant, documents from his employer indicated the following:

    (i)The Applicant's performance was rated as poor which is the lowest rating.

    (ii)Of the seven managers rated, the Applicant had the lowest rating.

    (iii)The three managers with the poorest rating (including the Applicant) were made redundant.

18. Relevant passages from the Applicant's letter of termination included the following:

    The company has been evaluating every aspect of the business over the past few months. Although our business continues to grow, we’re making efforts to streamline business processes and eliminate duplication. This effort will include a reduction in positions throughout the organisation. We have recently reviewed our workforce and have made the difficult decision to eliminate your position. As a result, I must advise your current position of IC manager, Tasmania, will become redundant effective 9 August 2011.

    Whilst we’ve considered alternate roles within Recall, Chep and Brambles for you, we're disappointed that we were unable to find a suitable position and therefore retain you within the company.

19. It was a part of the Applicant's case that the redundancy was in effect a dismissal for poor performance and, because of a lacunae in the evidence, further evidence was called from Witness A, an Operations Director with Recall, and a manager at the time of the Applicant's dismissal in 2011, and the Applicant's former manager Witness B.

20. Witness A’s evidence included the following:

    In August 2011 the Recall ANZ business undertook a significant restructuring process reducing its workforce by 10%.

    The role of Information Centre Manager Tasmania was identified early in the assessment process as no longer required, given the small nature of its operations. Due to the size in market (and limited number of employees based in Tasmania) we were able to combine the leadership of Tasmania with one of the Victorian Information Centre Manager’s responsibilities. As a result of the restructure, the Applicant’s position as Information Centre Manager Tasmania became redundant.

    To date the company has not replaced the Applicant’s position and the Tasmanian business continues to be managed by a Site Manager based in Victoria.

    The Applicant’s employment was not ended because of poor performance, but rather on the basis that his role was no longer required due to its size. The business had employees in Victoria who already fulfilled larger Site Manager roles who were capable of taking on the additional responsibility for managing the Tasmanian branch.

    The new structure required the Site Manager responsible for Tasmania to be based in Victoria to allow them to spend a larger amount of time managing one or more Victorian sites, with management of the Tasmanian site requiring only limited physical presence which could be satisfied through travel to Tasmania four times a year. As the Applicant was located in Tasmania, an existing Victorian Site Manager was considered a more appropriate choice for the business in the new structure.

    To the best of my knowledge, no other suitable alternate roles were available at the time of the restructure to consider the Applicant for.

    In relation to the document titled “Band 3 Assessment –Overall Team Summary”, the Band 3 assessment was performed by the Senior Leadership team in Sydney, in early August, and was completed for all Band 3 roles nationally. The Victorian assessment was on the basis of removing three roles from the Victorian and Tasmanian market, combining management responsibilities for multiple sites.

21. During his evidence the following exchange occurred as a result of me asking questions of Witness A:

    D.President: “Sorry. Can I just – Witness A, can I just ask a question here. You’ve told Mr Browne that one of the purposes of this restructure was not to get rid of underperforming employees. If that's the case, why were you examining performance of employees? --- I think it was more that ..... potential employees take on increased roles, so previously we had a structure that was service-line orientated, so we had more service lines with the restructure we then asked individuals to take on responsibility across all four service lines, so it's more the potential and the ability of the person to take on an increased role, multiple site management.”

    “And so if the Applicant had received a series of fours and fives and was very highly rated, was there then a potential for him to stay in Tasmania and take on the responsibility for one of the Victorian sites? --- No. The intention was always to have the site manager based on Victoria because of the size of the market, and then remote site management through to Tasmania, so it’s a Melbourne-based role.”

    “What, then, was the point of assessing the Applicant’s potential for taking on increased responsibility? --- I think just to show fair process going through and assessing everyone, but, certainly, as I said in my statement, the Tasmanian role was clearly identified early. It was no longer required and could be managed from Victoria.”

22. Despite careful and appropriate cross examination from Mr Browne, I find that one of the reasons for the Applicant’s termination was not his performance (or lack thereof) but that the position he was occupying was no longer required.

23. I also find another reason for termination was the lack of an appropriate position for him in the new structure.

24. In making these findings I also take into account the evidence of the Applicant’s former supervisor, Witness B, who’s evidence included:

    “My position with Recall was Manager of Operations, Southern Region, and I was located in Adelaide.

    I was retrenched on 30 September 2011 when the company undertook a restructure of management positions.

    The Applicant was Information Centre Manager of the Hobart office of Recall until August 2011. He was retrenched shortly before me.

    For the last 12 to 18 months of my employment with Recall I was the Applicant’s supervisor. Prior to that 12 to 18 month period, he had reported to someone else in Melbourne office. Before the period he reported to Melbourne office, I had again been his supervisor.

    In the company restructuring, the position as Information Centre Manager of the Hobart office was no longer required. Hobart was the smallest site in the country with about three or four employees and stagnant growth. Thereafter, the Hobart office just had a Team Leader.”

25. It was submitted that the Applicant was ‘displaced’ because he represented ‘risk’ to the employer, and there was no genuine redundancy.

26. It was also submitted that because the Applicant’s position had been taken by another employee (albeit with a different title) and that staff numbers at the Hobart office were unchanged following the Applicant’s departure and hence it was “conclusive” that the Applicant was not made redundant.

27. However, in a national company such as Recall, a restructuring that involved reductions in the numbers of management staff would also lead to a redefining of the roles and responsibilities for those remaining. In other words, the position that subsequently existed at the Hobart Office was not the same as the one the Applicant left, regardless of other staff numbers.

28. To succeed with this submission, the Applicant would have to demonstrate that the employer had mischaracterised the nature of his termination. The employer not producing comprehensive documents attesting to the restructuring and redundancy decisions was unhelpful but it did not prove that those decisions were not operational.

29. Accordingly I am satisfied that the redundancy scheme was a genuine effort by Recall to make their workplace more efficient and not an artifice to dismiss the Applicant.

30. I also find that if the redundancy measures had not been taken the Applicant would have continued to work, albeit in an ineffective manner, as a Manager of the Hobart Office noting that there were no performance reviews carried out between early 2007 and the Applicant's dismissal. There was no evidence from Witness B to suggest, absent the reorganization, that the Applicant's job was in jeopardy.

    OVERVIEW OF LEGISLATIVE SCHEME

31. Part 2 of the VEA deals with pensions other than service pensions for veterans.

32. Section 24 of the VEA sets out the requirements that the veteran must satisfy to be eligible for the pension at the special rate.

33. Where an application is made after the veteran turns 65, the application is subject to s24(2A) of the VEA. 

    S24(2A) provides:

34. This section applies to a veteran if:

    (a)  the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and

    (b)  the veteran had turned 65 before the claim or application was made; and

    (c)  paragraphs (1)(a) and (1)(b) apply to the veteran; and

    (d)  the veteran is, because of incapacity from war‑caused injury or war‑caused disease or both, alone, prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking before he or she made the claim or application; and

    (e)  because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and 

    (f)  the veteran was undertaking his or her last paid work after the veteran had turned 65; and

    (g)  when the veteran stopped undertaking his or her last paid work, the veteran:

    (i)  if he or she was then working as an employee of another person—had been working for that person, or for that person and any predecessor or predecessors of that person; or

    (ii)  if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling—had been so working in that profession, trade, employment, vocation or calling;

    for a continuous period of at least 10 years that began before the veteran turned 65; and

    (h)  section 25 does not apply to the veteran. [this section deals with temporary incapacity – so unless the veteran is temporarily incapacitated it won’t apply]

35. The following is relevant in terms of s24(2A)(c):

    S24(1) (a) either:

    (i)  the degree of incapacity of the veteran from war‑caused injury or war‑caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or

    (ii)  the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and

    (iii)  the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war‑caused injury or war‑caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week.

36. From my findings as set out above, it is clear that the Applicant satisfies almost all the relevant criteria with the only remaining matters to be considered being the meaning of remunerative work (last paid work) and whether the Applicant’s war caused condition alone prevented him from continuing to undertake remunerative work.

    SOME INSIGHTS FROM CASE LAW

37. The phrase ‘remunerative work’ is defined in a somewhat circular fashion in s5Q of the VEA:

    Remunerative work includes any remunerative activity.

38. In Repatriation Commission vButcher [2007] FCAFC 36 at [7] the Full Court opined:

    It is settled law that the subsection requires consideration of ‘remunerative work’ by having regard not to particular tasks and duties involved in specific jobs, but rather to the type of substantive work undertaken by the veteran considered at a higher level of generality: see Banovich v Repatriation Commission (1986) 69 ALR 395 at 402; Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225; and Repatriation Commission v Hendy [2002] FCAFC 424 ; (2002) 76 ALD 47 at 54.

39. At [13] the Full Court explained how error is avoided:

    On a fair reading of its reasons in this matter, the Tribunal paid regard not to the substantive remunerative work that the veteran had undertaken in the past, but to particular tasks performed by the veteran during the course of his employment. The Tribunal did not consider, in the general sense required by the subsection, the type of employment undertaken by the veteran but rather the particular duties in which he had been engaged. In so doing, the Tribunal has fallen into error. In our opinion, the primary judge was correct in finding that there had been an error of law in the approach taken by the Tribunal due to its overly narrow description of the remunerative work previously undertaken by the veteran

40. In Beezley v Repatriation Commission [2015] FCAFC 165 at [42], North, Tracey and Mortimer JJ draw attention to the fact that ‘remunerative work’ and ‘last paid work’ are used interchangeably.

41. Section s24(2A)(d) is broad. It appears to refer to any paid job that the veteran had to stop because of the veteran’s war-related injury (or disease).

42. However s24(2A)(g) qualifies s24(2A)(d). It makes clear that the remunerative work must for a continuous period of at least ten years that began before the veteran turned 65 and the remunerative work must be for either the one employer or self-employed in one’s own trade, profession, vocation, calling or employment over the relevant time

43. Consistent with this reading, in Repatriation Commission vHendy [2002] FCAFC 424 at [14], Whitlam, Emmet and Stone JJ their Honours’ inter alia considered what constituted the ‘relevant’ remunerative work: 

    The Tribunal had regard to the remunerative work that the Veteran was undertaking at the time he ceased work in 1995, namely delivery of alcohol by truck. It also referred to the later part-time work with "Materials in the Raw" involving the delivery, by truck, of garden soil, railway sleepers and similar garden goods. The Tribunal, however, considered that it should consider the Veteran's position under s24(1)(c) by reference to his former work in hotel administration and management and in truck driving or goods delivery. The Tribunal accepted that the Veteran's post-traumatic stress disorder with associated major depression and alcohol dependence prevent him from returning to such work.

    Thus, the Tribunal answered the first issue posed by reference to his former work in hotel administration and management and in truck driving and goods delivery. The Tribunal concluded, in relation to the second issue, that the Veteran's post-traumatic stress disorder and associated conditions prevent him from continuing to undertake relevant remunerative work.

44. Applying the above law to the facts in this case I accept Mr Browne’s submission that;

    Accordingly, the “remunerative work that the veteran was last undertaking” must be understood as a reference, in this case, to the Applicant’s work with Recall and/or an entity component of the Brambles Group, this is confirmed by the terms of s24(2A)(g) where, in relation to the requirement for a veteran who is working on their own account for a continuous period of 10 years, they are simply required to have worked continuously in a profession, trade, employment, vocation or calling.

1. Accordingly I am satisfied that the Applicant was prevented from continuing to undertake the remunerative work (last paid work) that he was last undertaking prior to his dismissal. ,

   THE ‘ALONE’ TEST IN S24(1)(C) AND S24(2A)(D) OF THE VEA

2. The ‘alone test’ was considered in Repatriation Commission v Richmond [2014] FCAFC 124; 226 FCR 21 at [58]-[61] am [65]:

   To qualify for the special rate the preventative effect must arise from the Veteran’s war caused incapacity alone and not from other non-war caused preventative factors as well. If other non-war caused factors contribute to the preventative effect, even if they are only of secondary importance and not of themselves sufficient to prevent the veteran from engaging in remunerative work, their presence will deny the veteran eligibility for the special rate.

   In our view the authorities on the alone element of the test in the first limb are clear. In Cavell (at 539-540) Burchett J expressly approved the tribunal’s statement that the use of ‘alone’ in s24(1)© means that any non-war caused factor which plays a part in the applicant’s inability to work or to obtain and hold remunerative employment is sufficient to displace the applicant’s case for a pension at the special rate.

   His Honour, correctly in our view, rejected the use of other descriptions in substitution for alone such as ‘sole, unique and absolute cause’ and explained at (539) that the Tribunal’s task was

   … to make a practical decision whether the veteran’s loss of remunerative work is attributable to his service related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.

   In Forbes v Repatriation Commission (2000) 31 AAR 381; [2000] FCA 328 at [39]-[40], Nicholson J took a similar approach and said;

   … The question whether the veteran by reason of the war caused condition ‘alone’ has been prevented from continuing to undertake remunerative work can only be answered by reference to all the circumstances in which the war caused condition exists. The fact that a non-war caused condition is not alone causative of such preventative effect does not prevent it having that effect in combination with the war-caused condition.

   … it is possible that the war caused condition will be by far and away the more dominant of the causes of the preventative effect where there is also present a non-war caused condition having such effect in combination. The result is that the presence of the latter will deny to a veteran qualification for the special rate of pension.

   We respectfully agree with the learned primary judge’s view (at 108) where her Honour said;

   The authorities in my view establish that if there is a non-war caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the ‘alone’ test will not be satisfied.

   Whilst this may be seen as a harsh result, it arises from the plain words of the section. The special rate of pension is almost three times higher than the general rate, and the extrinsic materials indicate that the legislature intends the special rate to be reserved for a limited category of veterans.

   Richmond was endorsed and followed in Watkins [2015] FCAFC 10; 228 FCR 573 at [61], Summers [2015] FCAFC 36; 230 FCR 179 at [194] and Beezley v Repatriation Commission [2015] FCAFC 165 at [45]

3. The ‘alone’ test is a factual question. To satisfy this test, the Applicant must show that the sole true reason his employment ended was that he was unable to perform his role on the basis of his war related condition.

4. The cessation of employment was initiated by the employer, not sought by the Applicant on medical grounds. If there was any genuine operational reason for the employer’s actions, then it constitutes another factor and the Applicant’s case fails the ‘alone’ test.

5. As I have already found a genuine operational reason for the employed action, it follows that the application is unsuccessful and I affirm the decision of the Veteran’s Review Board dated 25 March 2013.

I certify that the preceding 49 (forty-nine) paragraphs are a true copy of
the reasons for the decision herein of
A G Melick AO SC (Deputy President)

[Sgd]

Dated: 

Dates of hearing	4 & 5 May 2015, 4 August 2015
Solicitor for the Applicant	Mr Roland Browne, Fitzgerald and Browne Lawyers
Counsel for the Respondent	Mr Ken Rudge, Department of Veterans’ Affairs