Comcare Australia v Pires

Case [2005] FCA 747

FEDERAL COURT OF AUSTRALIA

Comcare Australia v Pires [2005] FCA 747

COMPENSATION – Appeal from Administrative Appeals Tribunal - meaning of s 8(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) – whether overtime to be included in calculation of normal weekly earnings

Safety, Rehabilitation and Compensation Act 1988 (Cth) – s 8

Acts Interpretation Act 1901 (Cth) – s15

Bortolazzo v Comcare (1997) 75 FCR 385 referred to
Bull v Attorney-General (NSW) (1913) 17 CLR 370 referred to
CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 referred to
Hoffman v Chief of Army [2004] FCAFC 148 referred to
Isherwood v Butler Pollnow Pty Limited (1986) 6 NSWLR 363 referred to
IW v City of Perth (1997) 191 CLR 1 referred to
Network Ten Pty Limited v TCN Channel Nine Pty Limited (2004) 205 ALR 1 referred to
Newcastle City Council v GIO General Limited referred to
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 referred to
R v Young (1999) 46 NSWLR 681 referred to
Re Bolton; Ex parte Beane (1987) 162 CLR 514 referred to
Re Zarb and Comcare (1997) 48 ALD 718 not followed
Refrigerated Express Lines (Australasia) Pty Limited v Australian Meat and Livestock Corporation (No 2) (1980) 29 ALR 333 referred to
Rieson v SST Consulting Services Pty Limited [2005] FCAFC 6 referred to

Pearce and Geddes, Statutory Interpretation in Australia, 5th Ed, Butterworths, Sydney, 2001

COMCARE AUSTRALIA v VIRATO PIRES
NSD 1880 of 2004

JACOBSON J
9 JUNE 2005

SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1880 of 2004

On appeal from a decision of the Administrative Appeals Tribunal

BETWEEN:

COMCARE AUSTRALIA
APPELLANT

AND:

VIRIATO PIRES
RESPONDENT

JUDGES:

JACOBSON J

DATE OF ORDER:

9 JUNE 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The decision of the Tribunal is to be set aside and the following decision substituted:-

(a)the decision under review is to be set aside.

(b)Mr Pires’ normal weekly earnings before the injury were $694.36.

3.There be no order as to costs.

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1880 of 2004

On appeal from a decision of the Administrative Appeals Tribunal

BETWEEN:

COMCARE AUSTRALIA
APPELLANT

AND:

VIRIATO PIRES
RESPONDENT

JUDGES:

JACOBSON J

DATE:

9 JUNE 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Introduction

  1. The appellant (“Comcare”) appeals on a question of law under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal (“the Tribunal”) constituted by Senior Member Allen. The Tribunal’s decision was given on 19 November 2004.

  2. Three questions of law are raised by the appeal. The questions are as to the proper construction of ss 8(1) and 8(2) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the Act”)

  3. Section 8 of the Act prescribes the method…

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Details
AGLC
Comcare Australia v Pires [2005] FCA 747
Case
[2005] FCA 747
Decision Date

CaseChat Overview and Summary

In the case of Comcare Australia v Pires, the appellant, Comcare, challenged a decision made by the Respondent, Mr Pires, regarding the calculation of weekly benefits under the Commonwealth Employees’ Rehabilitation and Compensation Act 1988. The dispute centred on whether certain overtime payments should be included in the calculation of normal weekly earnings for the purposes of determining the weekly benefits payable to Mr Pires. The matter was heard in the Federal Court of Australia.

The legal issue before the court was the interpretation of sections 8(1) and 8(2) of the Act, which outline the formula for calculating weekly benefits. The dilemma arose because including overtime in the calculation under section 8(1) would result in an employee being compensated twice if they were required to work overtime regularly. However, excluding overtime from the calculation under section 8(1) would mean that employees who worked overtime irregularly would not be compensated for that loss. The court needed to determine the correct interpretation of the Act that resolved this dilemma while adhering to the underlying policy of ensuring that injured workers are neither worse off nor better off during their period of incapacity.

The court found that the preferable interpretation was to include overtime that was not required and not regular in the calculation under section 8(1). This approach allowed employees who worked irregular overtime to be compensated, albeit at a lower rate for overtime, since the formula in section 8(1) only attracted the employee's average ordinary time rate of pay. The court considered that this interpretation was supported by the definition of "normal weekly hours" and the underlying policy of the Act, as observed by Heerey J in Bortolazzo v Comcare. By setting aside the decision of the Tribunal and substituting the appropriate decision, the court ensured that Mr Pires' normal weekly earnings were accurately calculated before his injury, resulting in a fair compensation outcome.

ORDERS:
1. The appeal be allowed.
2. The decision of the Tribunal is to be set aside and the following decision substituted:-
(a) the decision under review is to be set aside.
(b) Mr Pires’ normal weekly earnings before the injury were $694.36.
3. There be no order as to costs.

Orders

Orders of the court

1. The appeal be allowed.

2. The decision of the Tribunal is to be set aside and the following decision substituted:-

(a) the decision under review is to be set aside.

(b) Mr Pires’ normal weekly earnings before the injury were $694.36.

3. There be no order as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

JACOBSON J
Comcare relied on a passage from the Second Reading Speech on the Commonwealth Employees’ Rehabilitation and Compensation Bill 1988. I will set out the passage in full as follows:-“I turn now to the benefits which will be payable under this legislation. The benefits package is aimed specifically at assisting those employees most in need - that is, the long-term incapacitated workers. At the heart of the new scheme is the change from a system of fixed long-term benefits adjusted by regulation to one of weekly benefits calculated on the basis of the individual employee’s normal weekly earnings. An employee’s normal weekly earnings will be based on his or her pre-injury salary and will take into account certain allowances and regular rostered overtime which the employee is required to work as a condition of his or her employment. Employees who are incapacitated for work will receive weekly benefits equal to 100% of normal weekly earnings for the equivalent of the first 45 weeks of that incapacity.”(emphasis in original)The decision in Zarb The learned Deputy President pointed out at [16] that ss 8(1) and 8(2) of the Act raise a dilemma. If overtime is not included in the calculation under s 8(1) the employee will not be compensated for the loss even though some overtime is a feature of the employment, albeit that the overtime was not compulsory and not regular. However, if overtime is included in the calculation in s 8(1) an employee who worked overtime on a compulsory and regular basis will be compensated twice. This is because s 8(2) provides for “an additional amount” calculated in accordance with that formula to be added to the amount calculated under the formula in s 8(1). The approach which the Deputy President took to resolve the question and to arrive at the correct or preferable result was twofold. First, he looked at a number of possible interpretations of the two subsections. He decided at [22] that an interpretation which included overtime that was not required and not regular in s 8(1) was preferable, because it removed the dilemma which he had identified. He said that this approach allows an employee who works overtime that is not required and which is irregular to be compensated, though at a lower rate for overtime because the formula in s 8(1) attracts only the employee’s average ordinary time rate of pay. The second step was to ask whether this interpretation could be sustained by the wording of the Act. The Deputy President considered at [25] that some help could be obtained from the definition of “normal weekly hours” even though, as he recognised at [26], that expression does not appear in either s 8(1) or s 8(2). Nevertheless, the Deputy President was mindful of the fact that if the definition of “normal weekly hours” was applied to s 8(1) and s 8(2), an employee who worked overtime on a required and regular basis would be compensated twice. He referred to the decision of Heerey J in Bortolazzo v Comcare (1997) 75 FCR 385 (“Bortolazzo”) in which his Honour observed that the underlying policy of the Act is that an injured worker should be neither worse off, nor better off, during the period of incapacity.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

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