Comcare v Chenhall
[1996] FCA 745
•16 AUGUST 1996
CATCHWORDS
COMMONWEALTH EMPLOYEES COMPENSATION - whether earnings from non-government employment deductible from compensation payments - meaning of "suitable employment"
Safety Rehabilitation and Compensation Act 1988 (Cth): ss 19, 20 and 30
Superannuation Act 1976 (Cth): s 75(1)
Comcare v Gregory Charles Chenhall
No. QG 78 of 1996
Judge: Heerey J
Date: 16 August 1996
Place: Hobart (heard in Brisbane)
IN THE FEDERAL COURT OF AUSTRALIA )
)
QUEENSLAND DISTRICT REGISTRY ) No. QG 78 of 1996
)
GENERAL DIVISION )
(On appeal from the General Administrative Division of the Administrative Appeals Tribunal constituted by Mr K Beddoe, Senior Member)
B E T W E E N:
COMCARE
Applicant
- and -
GREGORY CHARLES CHENHALL
Respondent
JUDGE: Heerey J
DATE: 16 August 1996
PLACE: Hobart (heard in Brisbane)
MINUTES OF ORDER
The Court orders that:
The application is dismissed.
The applicant pay the respondent's costs including reserved costs.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA )
)
QUEENSLAND DISTRICT REGISTRY ) No. QG 78 of 1996
)
GENERAL DIVISION )
(On appeal from the General Administrative Division of the Administrative Appeals Tribunal constituted by Mr K Beddoe, Senior Member)
B E T W E E N:
COMCARE
Applicant
- and -
GREGORY CHARLES CHENHALL
Respondent
JUDGE: Heerey J
DATE: 16 August 1996
PLACE: Hobart (heard in Brisbane)
REASONS FOR JUDGMENT
The point raised in this appeal from the Administrative Appeals Tribunal constituted by Mr K Beddoe, Senior Member, is whether in assessing compensation under s 20 of the Safety Rehabilitation and Compensation Act 1988 (Cth) (the Act), Comcare should have deducted certain earnings of the respondent Mr Chenhall from non- Commonwealth employment. The context in which this question arose was a proposed redemption of payments to Mr Chenhall under s 30 of the Act. If the view Comcare took was correct, its liability to make payments to Mr Chenhall was less than $50 per week and redemption under s 30 was mandatory.
The history of Mr Chenhall's compensation disputes with Comcare is long and complicated. However for present purposes the
relevant facts can be shortly stated and are not in dispute.
Mr Chenhall was born in 1947. He joined what was then known as the Commonwealth Police in 1975. By an instrument dated 14 June 1989 the Commissioner of Police retired Mr Chenhall from the Australian Federal Police with effect from 18 June 1989. The retirement was effected because Mr Chenhall was incapable of performing his duties in consequence of physical and mental incapacity.
Mr Chenhall was in receipt of superannuation. By an instrument dated 20 April 1993 a delegate of the Commissioner for Superannuation determined that, after receiving reports from a number of doctors, including two psychiatrists, she was not satisfied that the health of Mr Chenhall had become so restored as to enable him to perform his former duties or other suitable duties. This determination was made under s 75(1) of the Superannuation Act 1976 (Cth) which provides:
Where the Commissioner is satisfied, after receiving the report or reports of a medical practitioner or medical practitioners with respect to the health of a person to whom invalidity pension is payable, that the health of the person has become so restored as to enable him to perform duties of a kind that are, in the opinion of the Commissioner, suitable to be performed by him (having regard to the duties performed by him immediately before his retirement on the ground of invalidity and to such other matters as the Commissioner considers relevant), the Commissioner shall so inform such person or authority as the Commissioner considers appropriate with a view to that person or authority finding suitable employment for the pensioner.
The Tribunal in the decision under appeal found that the effect of this determination was that Mr Chenhall was "considered to be not sufficiently restored to health to be found suitable
employment by the Commonwealth". The Tribunal continued:
The delegate's decision was taken in the knowledge that the applicant had been working in part-time employment, but it was also taken in the knowledge that the applicant, because of psychiatric illness, would best function in an isolated situation. That view was consistent with the findings on the medical evidence in these proceedings to the effect that the applicant cannot cope with a hierarchical structure in an organisation such as the Australian Federal Police.
The findings of the Tribunal in relation to Mr Chenhall's part-time employment were as follows:
Subsequent to being so retired the applicant undertook employment as a security officer with a company which carries on business providing security services and is well known as a commercial security service. Exhibit 2 is the pay records in relation to the applicant's employment by this company including a record of actual payments to the applicant. It is apparent from Exhibit 2 that the employment was of a casual nature because the hours worked from week to week seemed to vary between a maximum of approximately 50 hours per week and a minimum of around 10 hours per week. In certain weeks, the applicant worked in excess of 50 hours per week. It is clear enough, and I so find, that the applicant was able to earn income in other employment, but the question is whether he is able to earn income in suitable employment.
Because Mr Chenhall received as a result of his retirement a pension under a superannuation scheme, he was governed by s 20 of the Act. The quantum of compensation payable under s 20 is set forth in s 20(2) and (3) as follows:
Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated.
The amount of compensation is an amount calculated under the formula:
AC - (SA + SC)
where:
ACis the amount of compensation that would have been payable to the employee for a week if:
(a)section 19, other than subsection 19(6), had applied to the employee; and
(b)the week were a week referred to in subsection 19(3);
SAis the superannuation amount; and
SCis the amount of superannuation contributions that would have been required to be paid by the employee in that week if he or she were still contributing to the superannuation scheme.
One therefore turns to s 19, the section of general application to a Commonwealth employee who is incapacitated for work as the result of an injury. Compensation for each of the first 45 weeks (whether consecutive or otherwise) of incapacity is, by s 19(2), an amount calculated under the formula
NWE - AE
where:
NWEis the amount of the employee's normal weekly earnings; and
AEis the amount per week (if any) the employee is able to earn in suitable employment. (Emphasis added)
Section 19(3) and (4) provide:
Subject to this Part, Comcare is liable to pay to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in subsection (2), compensation:
(a)where the employee is not employed during that week - of an amount equal to 75% of his or her normal weekly earnings less the amount (if any) that he or she was able to earn during that week in suitable employment;
(b)where the employee is employed for 25% or less of his or her normal weekly hours during that week - of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 80% of his or her normal weekly earnings;
(c)where the employee is employed for more than 25% but not more than 50% of his or her normal weekly hours during that week - of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 85% of his or her normal weekly earnings;
(d)where the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week - of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 90% of his or her normal weekly earnings;
(e)where the employee is employed for more than 75% but less than 100% of his or her normal weekly hours during that week - of an amount that, when added to the amount that he or she was able to earn during that week in suitable
employment, results in an amount equal to 95% of his or her normal weekly earnings; and(f)where the employee is employed for 100% of his or her normal weekly hours during that week - of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 100% of his or her normal weekly earnings.
In determining, for the purposes of subsections (2) and (3), the amount per week that an employee is able to earn in suitable employment, Comcare shall have regard to:
(a)where the employee is in employment - the amount per week that the employee is earning in that employment;
(b)where, after becoming incapacitated for work, the employee received an offer of suitable employment and failed to accept that offer - the amount per week that the employee would be earning in that employment if her or she were engaged in that employment;
(c)where, after becoming incapacitated for work, the employee received an offer of suitable employment and, having accepted that offer, failed to engage, or to continue to engage, in that employment - the amount per week that the employee would be earning in that employment if her or she were engaged in that employment;
(d)where, after becoming incapacitated for work, the employee received an offer of suitable employment on condition that the employee completed a reasonable rehabilitation or vocational retraining program and the employee failed to fulfil that condition - the amount that the employee would be earning in that employment if he or she were engaged in that employment;
(e)where, after becoming incapacitated for work, the employee has failed to seek suitable employment - the amount per week that, having regard to the state of the labour-market at the relevant time, the employee could reasonably be expected to earn in such employment if he or she were engaged in such employment; and
(f)where paragraph (b), (c), (d) or (e) applies to the employee - whether the employee's failure to accept an offer of employment, to engage, or to continue to engage, in employment, to undertake, or to complete, a rehabilitation or vocational retraining program or to seek employment, as the case may be, was, in Comcare's opinion, reasonable in all the circumstances; and
(g)any other matter that Comcare considers relevant.
(Emphasis added)
"Suitable employment" is defined in s 4(1) of the Act in these terms:
"suitable employment", in relation to an employee who has suffered an injury in respect of which compensation is payable under this Act, means;
(a)in the case of an employee who, on the day on which he or she was injured was a permanent employee of the Commonwealth or a licensed corporation and who did not subsequently terminate that employment - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard
to:(i)the employee's age, experience, training, language and other skills;
(ii)the employee's suitability for rehabilitation or vocational retraining;
(iii)where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or her place of residence; and
(iv)any other relevant matter; and
(b)in any other case - any employment (including self-employment), having regard to the matters specified in subparagraphs (a)(i),(ii),(iii) and (iv).
Mr Chenhall fell within para (a) of that definition since on the day of injury he was a permanent employee of the Commonwealth who did not subsequently terminate his employment - it was terminated by the Commonwealth.
The Tribunal expressed its determinative finding in these terms:
I am satisfied, however, that the applicant is not able to earn an amount per week in suitable employment as defined because, based on the determination of the delegate of the Commissioner for Superannuation and based on the medical reports before the Tribunal and the findings of the previous Tribunal, the applicant is unable to be employed by of the Commonwealth in work to which he is suited, having regard to his age, experience, training, and other skills. I am satisfied that has been the case from the time of the applicant's retirement from the Federal Police. Although there is no evidence on the point, it might be thought at first glance that the applicant's ability to work for the security service on a casual basis might suggest that he was also able to work on a part time basis for the Australian Protective Service, an agency of the Commonwealth. I am satisfied, however, that the determination of the delegate of the Commissioner for Superannuation prevents such employment by the Commonwealth, while that determination is in effect. It follows, in my view, that I must find that the applicant is not able to earn an amount per week in suitable employment as defined.
As a consequence the Tribunal found that the figure for AE for the purposes of s 19 was nil. Calculations on that basis had the result that s 30 could have no operation.
On appeal, Comcare's argument was that s 19(4)(a) required the
Tribunal to have regard to the amount earned in actual employment, regardless of whether that employment was "suitable employment". Attention was drawn by counsel to the use of the word "employment" in s 19(4)(a) as distinct from "suitable employment" in paragraphs (b) - (e). It was said that the interpretation contended for was consistent with the ordinary meaning of the word "employment" and with the intention of the statute to "avoid double dipping".
However in my respectful opinion this argument misunderstands the function served by s 19(4). That provision is concerned with the amount the employee is able to earn in "suitable employment". The amount the employee is in fact earning in any employment (whether "suitable employment" or not) is only relevant in so far as it assists in that determination. If the intention had been to deduct from compensation entitlements all actual earnings, that object could have been achieved very simply.
To take a hypothetical example, let it be assumed that there are two lawyers who are permanent employees of the Commonwealth. They are both experienced and capable and engaged in work at a senior level in the Australian Government Solicitor's office. Both are injured and both have their employment terminated by the Commonwealth. From then on, their fortunes diverge. Lawyer A becomes a partner in a leading city law firm earning $5,000 per week. Lawyer B suffers from a severe nervous and psychological condition and can only obtain casual gardening work at $200 per week. In the case of lawyer A, the income she commands in private practice would be a strong indication that she would be able to earn income as a lawyer in the Commonwealth service, and probably at the highest level. In her case, the figure AE would be the income for such a position. It would probably be equal to or greater than her normal weekly earnings (see s 8). In that event, her compensation would be nil.
As to lawyer B however, Comcare would "have regard" to his gardening earnings, in the sense of taking them into account, or considering them. But the fact B was earning $200 per week as a gardener would not indicate that he was able to earn any amount at all in what was "suitable employment" for him, that is to say legal work at a level in the Commonwealth service for which he was suited by reason of his age, experience, training and any other relevant factors mentioned in the definition. The figure AE would therefore be nil. Comcare would not deduct $200 per week from his compensation.
I do not think that reference to "double dipping" is of great assistance. The term is more of a slogan than a concept having any fixed meaning, but as I understand it refers to a person who takes two or more government benefits when those benefits should, morally at least, be alternatives. However Mr Chenhall is not "double dipping". His entitlement to compensation simply reflects the fact that he is unable to earn anything in "suitable employment".
In my opinion, the Tribunal correctly applied the Act once it had found that there was no amount Mr Chenhall was able to earn in "suitable employment". The application will be dismissed with costs, including reserved costs.
I certify that this and the preceding eight (8) pages are a true copy of the reasons for judgment of his Honour Justice Heerey.
Dated:
Associate
Appearances
Counsel for the applicant: Mrs J Bonsey
Solicitor for the applicant: Australian Government Solicitor
Counsel for the respondent: Mr P D T Applegarth
Solicitor for the respondent: Mullins & Mullins
Date of hearing: 2 August 1996
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