FEDERAL COURT OF AUSTRALIA
Comcare v Nicolas [2014] FCAFC 122
Citation: Comcare v Nicolas [2014] FCAFC 122 Appeal from: Nicolas and Comcare [2014] AATA 189 Parties: COMCARE v ANNABELLE NICOLAS File number(s): NSD 438 of 2014 Judge(s): EDMONDS, BUCHANAN AND FLICK JJ Date of judgment: 22 September 2014 Catchwords: WORKER’S COMPENSATION – appeal from a decision of the AAT under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) – compensation for injury calculated under s 8 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) – calculation of relevant period under s 9 – where the relevant period for the purposes of s 8 may not fairly reflect normal pre-injury weekly earnings – whether two-week period prior to injury was fairly representative of normal weekly earnings where employee worked shortened hours under a graduated return to work program Legislation: Administrative Appeals Tribunal Act 1975 (Cth), s 44(7)
Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 4, 8, 8(1), 8(2), 8(4), 8(5), 9, 9(1), 9(2), 9(3), 9(4), 19
Workplace Relations Act 1996 (Cth)Cases cited: Nicolas and Comcare [2014] AATA 189 Date of hearing: 18 August 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 51 Solicitor for the Applicant: Mr B Dube, Sparke Helmore Lawyers Counsel for the Respondent: Ms M Fraser Solicitor for the Respondent: Castagnet Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 438 of 2014
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN: COMCARE
ApplicantAND: ANNABELLE NICOLAS
Respondent
JUDGES:
EDMONDS, BUCHANAN AND FLICK JJ
DATE OF ORDER:
22 SEPTEMBER 2014
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The appeal be upheld.
2.Order 1 of the Administrative Appeals Tribunal’s orders of 4 April 2014 be set aside and in lieu thereof it be ordered that the decision under review is affirmed.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 438 of 2014
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN: COMCARE
ApplicantAND: ANNABELLE NICOLAS
Respondent
JUDGES:
EDMONDS, BUCHANAN AND FLICK JJ
DATE:
22 SEPTEMBER 2014
PLACE:
SYDNEY
REASONS FOR JUDGMENT
THE COURT:
On 13 May 2011 the respondent (Ms Nicolas) sustained a psychological injury for which Comcare (on behalf of her employer) accepted liability. The question then arose as to what were her “normal weekly earnings” for the purpose of assessing her entitlement to compensation for her resulting incapacity to work.
That issue has proved contentious. It involves the application of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the SRC Act”).
Background Facts
Ms Nicolas works for Centrelink. She commenced working for Centrelink full-time in April 2001. In March 2007 her first child was born and, on her return to work in January 2008, Ms Nicolas resumed part-time work at a regular 30 hours per week with some regular overtime of three to four hours per week.
On 8 December 2008…
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CaseChat Overview and Summary
In the matter of Comcare v Nicolas, the Federal Court was asked to consider the appropriate method for calculating an employee's normal weekly earnings (NWE) for the purposes of determining worker's compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth). The case involved Ms Nicolas, an employee of Centrelink who had been involved in two separate injuries, one in December 2008 and another in May 2011. The dispute centred on how to determine her NWE for the calculation of compensation for the injury sustained in May 2011, particularly whether the two weeks immediately preceding the injury or a longer period should be considered representative of her pre-injury earnings.
The key legal issue before the court was whether the Administrative Appeals Tribunal (AAT) had correctly applied the statutory framework when it determined Ms Nicolas's average working week hours for the calculation of her NWE. Section 8 of the SRC Act provides a formula for calculating NWE, and section 9(1) defines the "relevant period" for this calculation as the latest two weeks before the date of injury during which the employee was continuously employed. The AAT had determined that Ms Nicolas's average working week should be regarded as 20 hours, rather than the two weeks of 12 hours per week she worked immediately before her injury, which Comcare had used.
The Court found that the AAT had misapplied the statutory scheme in determining Ms Nicolas's average working week. It held that the AAT was not entitled to reject the two-week period prior to the injury as the period to be used for the calculation under section 8(1). The Court set aside the AAT's order and affirmed the original decision by Comcare that Ms Nicolas's NWE should be calculated based on the two weeks of 12 hours per week she worked before her injury. The Court emphasised that the AAT should have adhered to the statutory definition of "normal weekly hours" and the specified "relevant period" as outlined in the SRC Act.
In conclusion, the Court upheld Comcare's appeal, affirming that the decision under review should stand. The Court ordered that the AAT's order be set aside and replaced with an order affirming Comcare's original decision regarding the calculation of Ms Nicolas's NWE. This decision underscores the importance of strictly adhering to statutory definitions and periods when calculating worker's compensation under the SRC Act.
The key legal issue before the court was whether the Administrative Appeals Tribunal (AAT) had correctly applied the statutory framework when it determined Ms Nicolas's average working week hours for the calculation of her NWE. Section 8 of the SRC Act provides a formula for calculating NWE, and section 9(1) defines the "relevant period" for this calculation as the latest two weeks before the date of injury during which the employee was continuously employed. The AAT had determined that Ms Nicolas's average working week should be regarded as 20 hours, rather than the two weeks of 12 hours per week she worked immediately before her injury, which Comcare had used.
The Court found that the AAT had misapplied the statutory scheme in determining Ms Nicolas's average working week. It held that the AAT was not entitled to reject the two-week period prior to the injury as the period to be used for the calculation under section 8(1). The Court set aside the AAT's order and affirmed the original decision by Comcare that Ms Nicolas's NWE should be calculated based on the two weeks of 12 hours per week she worked before her injury. The Court emphasised that the AAT should have adhered to the statutory definition of "normal weekly hours" and the specified "relevant period" as outlined in the SRC Act.
In conclusion, the Court upheld Comcare's appeal, affirming that the decision under review should stand. The Court ordered that the AAT's order be set aside and replaced with an order affirming Comcare's original decision regarding the calculation of Ms Nicolas's NWE. This decision underscores the importance of strictly adhering to statutory definitions and periods when calculating worker's compensation under the SRC Act.
Orders
Orders of the court
1. The appeal be upheld.
2. Order 1 of the Administrative Appeals Tribunal’s orders of 4 April 2014 be set aside and in lieu thereof it be ordered that the decision under review is affirmed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
That issue has proved contentious. It involves the application of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the SRC Act”). Background Facts Ms Nicolas works for Centrelink. She commenced working for Centrelink full-time in April 2001. In March 2007 her first child was born and, on her return to work in January 2008, Ms Nicolas resumed part-time work at a regular 30 hours per week with some regular overtime of three to four hours per week. On 8 December 2008 Ms Nicolas was involved in a motor vehicle accident and further reduced her hours of work. Then, because of a combination of her injuries, periods of leave, complications during a further pregnancy, the birth of a second child in April 2009 and spinal surgery in May 2009, Ms Nicolas only worked for two days (in April 2010) between 26 February 2009 and 1 May 2011. On 2 May 2011, Ms Nicolas returned to work. She did so on an agreed graduated return to work program commencing at 12 hours per week, with those hours intended to increase to 22.5 hours per week over a period. She had only worked those initially agreed 12 hours for two weeks (during an 11-day period) before she sustained her psychological injury on 13 May 2011. It is relevant to note here that on 24 May 2011 an insurance claim arising out of the motor vehicle accident on 8 December 2008 was settled and Ms Nicolas received a lump sum order for compensation. During those proceedings it was claimed on her behalf that, as a result of her injuries in that accident, she had suffered a 50% loss of pre-accident earning capacity. Comcare’s decision When Comcare assessed Ms Nicolas’ entitlement to compensation for her most recent injury (on 13 May 2011) it did so on the basis that Ms Nicolas’ working hours, for the calculation of normal weekly earnings, were 12 hours per week. The AAT decision Ms Nicolas applied to the Administrative Appeals Tribunal (“the AAT”) for review of Comcare’s decision. The AAT rejected the proposition that 12 hours per week should be adopted for the calculation of normal weekly earnings before the injury sustained on 13 May 2011. The AAT found that Ms Nicolas’ average working week should be regarded as 20 hours and directed that compensation be calculated on that basis. The appeal to this Court Comcare has appealed. The appeal to this Court is a proceeding in the original jurisdiction of the Court. The appeal must be on a question of law. In our view, the AAT misapplied aspects of the statutory scheme and the appeal must therefore be upheld. The legislative scheme Section 19 of the SRC Act requires compensation to be paid to an injured employee if the injury results in incapacity for work. The calculation begins with “NWE” which is stated to be “the amount of the employee’s normal weekly earnings”. Section 4 defines “normal weekly earnings” as follows: 4 Interpretation(1)In this Act, unless the contrary intention appears: … normal weekly earnings means the normal weekly earnings of anemployee calculated under section 8.
Evidence
Evidence Before The Court
For this reason also, the AAT did not, in our view, apply the statutory scheme. Fresh evidence On the appeal to this Court, Comcare relied (although it had not done so before the AAT) on the terms of an agreement made under the Workplace Relations Act 1996 (Cth) (the Centrelink Agreement 2009-2011). This new case was accompanied by a submission that the agreement was a “form of delegated legislation” about which the AAT was obliged to inform itself, independently of the conduct by the parties of their respective cases. It is not necessary to rule on this submission. The agreement was accepted as evidence on the appeal subject to its relevance. It is not relevant to refer to it to decide the appeal. However, we would not accept that Comcare could fail to draw the attention of the AAT to material important for its case and then reasonably complain if the AAT did not refer to it, or take it into account. It is not necessary to say more about the issue in the present case. Relief In our view, Comcare has made out its case that the AAT failed to apply the statutory scheme. This is one of those cases where this Court might make limited factual findings for the purpose of deciding the appeal (Administrative Appeals Tribunal Act 1975 (Cth) , s 44(7)). It appears to us, on the findings which the AAT did make, that it was not open to the AAT to reject the period of two weeks prior to the injury on 13 May 2011 as the period to be used for the calculation under s 8(1) and that it was an error for the AAT to have done so. The appropriate order is to set aside Order 1 of the AAT and order instead that the decision under review be affirmed. Comcare has accepted that it should pay the costs of the appeal regardless of the outcome. On that basis we would not disturb the costs order made by the AAT.
Decision
Reasons for decision
When Comcare assessed Ms Nicolas’ entitlement to compensation for her most recent injury (on 13 May 2011) it did so on the basis that Ms Nicolas’ working hours, for the calculation of normal weekly earnings, were 12 hours per week. The AAT decision Ms Nicolas applied to the Administrative Appeals Tribunal (“the AAT”) for review of Comcare’s decision. The AAT rejected the proposition that 12 hours per week should be adopted for the calculation of normal weekly earnings before the injury sustained on 13 May 2011. The AAT found that Ms Nicolas’ average working week should be regarded as 20 hours and directed that compensation be calculated on that basis. The appeal to this Court Comcare has appealed. The appeal to this Court is a proceeding in the original jurisdiction of the Court. The appeal must be on a question of law. In our view, the AAT misapplied aspects of the statutory scheme and the appeal must therefore be upheld. The legislative scheme Section 19 of the SRC Act requires compensation to be paid to an injured employee if the injury results in incapacity for work. The calculation begins with “NWE” which is stated to be “the amount of the employee’s normal weekly earnings”. Section 4 defines “normal weekly earnings” as follows: 4 Interpretation(1)In this Act, unless the contrary intention appears: … normal weekly earnings means the normal weekly earnings of anemployee calculated under section 8. Section 8 provides a formula for calculating normal weekly earnings. It is critical to the present case. Section 8(1) provides: 8 Normal weekly earnings(1)For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula: (NH x RP) + Awhere: NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period; RP is the employee’s average hourly ordinary time rate of pay during that period; and A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment. Before dealing with other aspects of s 8 it is desirable to refer to other provisions which inform its use. Section 4 provides a definition of “normal weekly hours” for use in the calculation stipulated in s 8(1) as follows: 4 Interpretation(1)In this Act, unless the contrary intention appears: … normal weekly hours, in relation to an employee, means the average number of hours (including hours of overtime) worked in each week by the employee in his or her employment during the relevant period as calculated for the purpose of applying the formula in subsection 8(1) or (2). Section 9(1) stipulates the “relevant period” for the purposes of s 8 as follows: 9 Relevant period(1)For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation. …
Ratio Decidendi
Legal Principle Established
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