Comcare v Rawling

[1993] FCA 362

COMMISSION FOR THE SAFETY REHABILITATION AND COMPENSATION OF COMMONWEALTH
EMPLOYEES (COMCARE) v. JUDITH ANN RAWLING
No. SG8 of 1993
FED No. 362
Number of pages - 7
Administrative Law
(1993) 17 AAR 548
(1993) 42 FCR 421

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
O'Loughlin J(1)

CATCHWORDS

Administrative Law - Compensation - employee - employed by the Department of Veteran Affairs - originally totally incapacitated - employee resigned and moved interstate during period of total incapacity - employee thereafter assessed as capable of performing light duties two days a week - compensation entitlement reduced by 40% - no evidence that such light duties available - effect of resignation and move interstate on employee's ability to earn.

Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth): s19

R.J. Brodie (Holdings) Pty Limited v Pennell (1969) 117 CLR 665

HEARING

ADELAIDE, 5 April 1993

#DATE 28:5:1993

Counsel for the Appellant: Mr S.C. Cole

Solicitors for the Appellant: Australian Government Solicitor

Counsel for the Respondent: Mr T.D. Bourne

Solicitors for the Respondent: Messrs Stanley and Partners

ORDER

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondent's costs to be taxed in default of

agreement.

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

JUDGE1

O'LOUGHLIN J The respondent to this appeal, Judith Ann Rawling, suffered a soft tissue injury to her lower back on 31 August 1989 when working as a senior enrolled nurse. She was then employed by the Department of Veteran Affairs ("the Department") at the Repatriation General Hospital at Heidelberg, Victoria. The injury occurred when she was helping a patient transfer from his bed to a chair.

1. Ms Rawling was able to resume her duties on 18 October 1989 but three days later aggravated her lumbar muscular strain when she attempted to support an unstable patient. For one reason or another, she has been unable to resume permanent full-time employment since that date.

2. In November 1989, Ms Rawling tendered her resignation to the Hospital with effect from 22 November citing as her reason that she was "moving interstate to live". In fact, she moved to Adelaide with her fiancee in January 1990.

3. In March 1990 Ms Rawling underwent medical assessment at the Alfreda Rehabilitation Centre in South Australia where a diagnosis confirmed that she remained unfit for work. However, her subsequent participation in a remedial treatment programme at the Centre sufficiently improved her condition that she commenced to seek employment. Her attempts were unsuccessful and she remained unemployed until November 1990 when she commenced a three month "work trial" at the Department's Repatriation General Hospital at Daw Park, South Australia. That trial, which was organised by the Commonwealth Rehabilitation Service, Comcare and the Department, was designed to assess whether Ms Rawling could return to full-time nursing duties. The report of her trial, dated 28 February 1991, was highly complimentary of Ms Rawling and her commitment but concluded that she was unable to achieve "full-time hours"; it assessed her as having the limited ability "to manage an 8 hour day two days a week".

4. The report of 28 February 1991 led a Review Officer of the appellant, Comcare, to conclude on 13 November 1991 that Ms Rawling's ability to earn should be deemed to be an amount equivalent to 40% of a salary payable to an enrolled nurse and her weekly compensation payments were reduced accordingly from 1 February 1991, the date of the conclusion of the trial period at Daw Park.

5. For the first 45 weeks of her incapacity Ms Rawling had received compensation equal to her "normal weekly earnings" pursuant to the provisions of subs19(2) of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth) "the Act"). It was common ground that during that period she had not been able to earn nor should she be deemed as having been able to earn anything in suitable employment. Thereafter, and consistent with the provisions of subs19(3) of the Act, her weekly compensation payments had been reduced to 75% of her normal weekly earnings and had continued at that rate until the Review Officer's decision of 13 November 1991. The relevant extracts from that decision were as follows:
   

"Your resignation, for personal reasons of moving to Adelaide, was seen as an act of removing yourself from available employment. Thus your loss of income (to the extent of that which would have been payable at Heidelberg) is deemed to result from your resignation, and not to result from your injury.

My finding in this matter, on the evidence before me and on the basis of probability as opposed to possibility, is that your resignation was unrelated to your injury, and was in the knowledge of the availability of suitable employment. ..."

1. On Ms Rawling's application, the Administrative Appeals Tribunal set aside that decision holding that no offer of suitable employment had, in fact, been made to Ms Rawling. It remitted the matter to Comcare for reconsideration in accordance with its direction that in calculating Ms Rawling's entitlement to compensation "the amount that she was able to earn during the period from 1 February 1991 be valued at nil". Comcare now appeals to this Court from the whole of the Tribunal's decision.

2. The extent of the compensation that is payable to an injured worker is set out in s19 of the Act. The provisions of that section, so far as they are material for the purposes of this appeal, are as follows:
   

"19.(1) This section applies to an employee who is incapacitated for work as a result of an injury...

(2) Subject to this Part, Comcare is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount calculated under the formula: NWE - AE

where:

NWE is the amount of the employee's normal weekly earnings; and

AE is the amount per week (if any) that the employee is able to earn in suitable employment.

(3) 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) ...

(c) ...

(d) ...

(e) ...

(f) ...

(3A) ...

(4) 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 he 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 the 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 he 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;

(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."

1. Although the Tribunal based its decision on the issue concerning an offer of re-employment to Ms Rawling, it must be emphasised that subss (2) and (3) are the provisions that determine the extent of the liability of Comcare; they make it clear that the liability will be diminished by the amount that the employee is able to earn in suitable employment. Subsection (4) merely identifies, in a non-exhaustive manner, matters to which Comcare shall have regard to for the purpose of determining the amount per week that an employee is able to earn in suitable employment. Thus an offer of employment by the employer and the employee's response to that offer are matters of the utmost importance but they are not the only determining factors; for example, in more propitious times, Comcare might be able to determine, quite properly, that an employee has an ability to earn in suitable employment and that the suitable employment is available to the employee even though the employer has not made any offer of re-employment to the injured worker. In such circumstances, the failure by the employer to make an offer of suitable employment would not prevent Comcare from making the appropriate deduction in assessing its liability to pay compensation to the employee.
   

2. In paragraph 10 of its deliberations the Tribunal said:
   

"The Tribunal now turns to what it considers to be the crux of this reference. Did the applicant, after becoming incapacitated, receive an offer of suitable employment from either the Commonwealth or any other employer - see definition of suitable employment in s.4 of the Act - and, having received that offer, fail to accept it? It is not disputed that no offer has been made by the Commonwealth since the applicant left Victoria nor that any offer has been forthcoming from any other employer."

1. The Tribunal then proceeded to analyse the evidence of Ms Ferry, an occupational therapist who was, at the relevant time, the Occupational Health and Safety Co-ordinator at Heidelberg. It found that Ms Ferry was aware of the injuries suffered by Ms Rawling and that she was also aware of the existence of a medical certificate that indicated that Ms Rawling might be able to return to normal duties on 30 October 1989. The Tribunal then found at paragraph 12:
   

"Armed with that information she rang (Ms Rawling) to organise an assessment of her disability. Upon completion of that assessment an attempt would be made to ascertain what duties were suitable for a person possessing that degree of disability. By way of reply, she was informed by (Ms Rawling) that she would be going to Adelaide to live and thus there was no point in proceeding to an assessment of disability."

1. It is not clear from a reading of the reasons of the Tribunal whether the last phrase "... and thus there was no point in proceeding to an assessment of disability" constituted the Tribunal's summary of Ms Ferry's evidence or represented the Tribunal's conclusion on the facts as found by it. The relevant passage in Ms Ferry's evidence appeared during the course of her cross-examination:
   

"Look, if I suggest to you that in fact at that conversation, although it appears that you rang and you spoke to Miss Rawling about when she was going to return to work, that there was in fact nothing said about rehabilitation or about light duties being available. Do you dispute that?... I just say that I do not remember that conversation. I'm only trading on the fact that I remember speaking to her, I remember her telling me she was moving to Adelaide. I'm just saying that on a general basis, that may have been the tack I took with all clients who were injured in explaining the service. If before I got to that point, she had told me she was resigning, I doubt whether I would have continued."

1. Elsewhere in her evidence it was put to Ms Ferry that she would first assess the extent of a disability before making any offer of employment. In response, she said:
   

"I believe that would quite possibly be correct because there would be no information as to what type of duties a person might be able to perform, apart from the minimal evidence which was normally on a medical certificate."

After quoting this passage from the evidence of Ms Ferry, the Tribunal said in paragraph 13 of its reasons:

"The Tribunal accepts that Ms Ferry telephoned the applicant soon after 30 October 1989 and spoke with her regarding an arrangement for the assessment of disability and that the reply was along the lines as previously indicated."

1. The reference to "the reply... along the lines as previously indicated" was, I take it, an acceptance of Ms Ferry's evidence, the effect of which was that Ms Ferry considered it pointless to proceed with an assessment of Ms Rawling's disability after being informed that she would be moving to Adelaide to live.

2. The findings of the Tribunal on the question of any offer of suitable employment by the employer to Ms Rawling were thereafter stated in paragraph 16 of its reasons in these terms:
   

"Having regard to all of the evidence before it, the Tribunal is satisfied that the applicant did not receive an offer of suitable employment and thus (it is) our conclusion that paragraphs (b), (c) and (d) (of subs19(4) of the Act) have no application."

1. Later the Tribunal said in paragraph 17:
   

"It should be noted that there is no compulsion on the employer to make an offer of suitable employment. If the employer has and the employee fails to accept that offer then the compensation will be paid at the reduced rate. If no offer is forthcoming, then the employer bears the consequences. We fail to comprehend how the resignation prevented or impeded the employer from making an offer of suitable employment."

1. Based upon these findings the Tribunal concluded that it had no cause to consider the effect of paragraphs (b), (c), (d) or (f) of subs19(4) because of the absence of a relevant offer. The Tribunal further made a specific finding of fact that Ms Rawling had actively sought suitable employment. That finding therefore excluded the operation of paragraph (19)(4)(e).

2. As to paragraph 19(4)(g), which entitled Comcare to have regard to "any other matter that Comcare considers relevant" the Tribunal said, in paragraph 19 of its reasons, that "the thrust" of subs19(4) of the Act was:
   

"... to penalise those employees who have either declined without good reason offers of suitable employment or failed to seek suitable employment."

1. The Tribunal then went on to say that as Ms Rawling did not fall within either of these categories, the Tribunal considered the application of paragraph (g) "inappropriate". The Tribunal's reasoning suggests that it was of the opinion that the words "any other matter that Comcare considers relevant" were to be read eiusdem generis with selective language from some of the earlier paragraphs of subs19(4); thus paragraph (b) deals with a failure to accept an offer whilst paragraph (e) is directed to the failure to seek suitable employment. I do not consider that there is any justification for such a limited and selective interpretation. The object of subs19(4) is to aid in the determination of the extent of an injured employee's ability to earn. Hence, although the subsection makes no reference to it, conduct on the part of an employee in removing herself to a remote location in the knowledge that there would be no job opportunities would properly be a relevant matter for Comcare's consideration under paragraph 19(4)(g). Contrary to the views expressed by the Tribunal, I consider that the act of resignation and the move to Adelaide were matters that Comcare was entitled to take into consideration for the purpose of assessing whether they were "relevant". But on the other hand, and in the circumstances of this case, I share the ultimate view of the Tribunal that Ms Rawling should not be penalized. Whilst I consider that it would be proper for Comcare to have regard to those matters, I do not consider that a proper regard to them could affect the outcome of these proceedings. The act of resignation and the movement interstate from one capital city to another did not in any way inhibit Ms Rawling's employer from making a genuine offer of suitable employment - perhaps at her original place of employment - perhaps at some other location. If, because of her personal circumstances, Ms Rawling being medically fit to accept the offer unreasonably rejected it, then her compensatory entitlements would be at risk of being eroded in the manner contemplated by paragraph 19(4)(b).

2. In the course of its decision, however, the Tribunal made a finding of fact that there had been no offer of employment made to Ms Rawling when she was contacted by Ms Ferry. No doubt Ms Ferry was dissuaded, as a matter of fact, from making an offer because of the way in which Ms Rawling reacted (with her advice that she was moving to Adelaide). But Ms Ferry would have been within her rights to pursue the matter, to make the offer, and thereby force Ms Rawling to decide whether her personal wishes or her employment was the more important. The fact that Ms Ferry omitted to pursue this avenue is a consequence that Comcare must bear and continue to bear until such time, if at all, as the Department chooses to make an offer of suitable employment to Ms Rawling.

3. The first argument advanced by Comcare on the appeal was that the telephone conversation between Ms Ferry and Ms Rawling in late October 1989 should be characterised as an offer of employment. Even if it could be said that the Tribunal's finding on this issue amounted to an error of law that was open to review by this Court, for the reasons that I have already set out, I do not agree that it can be described as such an offer. But let it be assumed that I am wrong and that in late October 1989 some offer of employment was made on behalf of the Department to Ms Rawling; what would turn on such a finding? The evidence disclosed that in October 1989 Ms Rawling was totally incapacitated and she was still totally incapacitated in March 1990 when she was examined at the Alfreda Central. It is therefore a fair inference that she remained totally incapacitated in the intervening space of time. If in fact or in law Ms Rawling did receive some offer of employment in that time, she was wholly within her rights in rejecting it (see paragraph 19(4)(f)). Her conduct, therefore, would have been reasonable in all the circumstances.

4. The second argument advanced by Comcare was based upon paragraph 19(4)(g) of the Act that - in determining the amount per week that an employee is able to earn in suitable employment - Comcare shall have regard to "any other matter that Comcare considers relevant". In this context, Comcare submitted that there was evidence before the Tribunal that was sufficient to justify a finding that the Department's conduct in inviting Ms Rawling to submit to an assessment of her disability so that an appropriate offer of suitable employment might be made was a matter that Comcare could properly consider relevant. Even if this submission be correct, it is a futile argument and it would benefit no one to send that matter back for reconsideration by the Tribunal. The evidence has established that Ms Rawling remained totally incapacitated until March 1990. Thereafter she participated in the Alfreda Centre's rehabilitation program and later in the appellant's work trial; this conduct evidenced a clear intention to do all within her power to return to the workforce. After all, it is common ground that neither the Department nor the Repatriation Hospitals have made any offer of work to her after her three month trial. And it is not suggested that there was suitable part-time work available elsewhere (whether in Adelaide or Melbourne).

1. The next issue that was raised by the appellant was the identity of Ms Rawling's employer. Was it the Department with its work opportunities in various hospitals throughout the Commonwealth or was it the Repatriation General Hospital at Heidelberg, Victoria? Mr Cole, counsel for the appellant, argued that the Heidelberg Hospital should be identified as the correct employer so as to forestall any submission that Ms Rawling had some right or expectation to look for employment from the Department at the Repatriation General Hospital at Daw Park, South Australia. Once again, there is, in my opinion, a degree of futility in this submission. If there was any offer of employment to Ms Rawling it was made in late 1989 when Ms Rawling was totally incapacitated and wholly justified in taking no action in respect of it. Since then no offer has been made to her by any party. If, at a later date, a suitable offer is made to her for two days work per week at Heidelberg and she rejects it on the ground that she should be offered similar work at Daw Park, it will be time enough then to consider her entitlements and her responsibilities. If at a later date Comcare seeks to apply the provisions of paragraph 19(3)(a) of the Act against Ms Rawling (without calling in aid any of the provisions of subs19(4)) because, for example, it is claimed that there is an ample market for part-time work for people with Ms Rawling's disabilities, it will be time enough then to consider whether Comcare has acted reasonably.

2. It remains then to consider the final argument that was raised by the appellant. What consequences, if any, flowed from Ms Rawling's letter of resignation? In short, Mr Cole submitted that it relieved her employer from thereafter having to supply her with suitable employment. In support of that proposition, Mr Cole relied upon (inter alia) the decision of the High Court in R.J. Brodie (Holdings) Pty. Ltd. v Pennell (1968) 117 CLR 665, a case that dealt with the provisions of subs11(2) of the Workers' Compensation Act 1926 (NSW). That subsection required an employer to make provision of suitable employment for his injured worker during the worker's partial incapacity for his pre-injury employment. If the employer failed to do so then the worker's partial incapacity was deemed, for the purpose of calculating the amount of his compensatory payments, to be a total incapacity. In R.J. Brodie's case, the employer argued unsuccessfully that the provisions of subs11(2) could not assist a partially incapacitated worker who had elected to engage in a business from which he derived a small profit. The High Court held that, in order to deny him the benefits of the subsection, it must be shown that the worker was not ready, willing or able to enter the employ of the pre-injury employer. In the course of explaining the effect of the provisions of subs11(2), Kitto, Taylor, Windeyer and Owen JJ said at 669:
   

"A clue to the true solution may, perhaps, be found in the somewhat loose language of the sub-section itself for the 'provision' of suitable employment involves an element of mutuality. Employment is not a commodity which can be provided merely by an offer; it can in strictness be provided only by the employer and employee entering into and performing their obligation under a contract of service and this involves the co-operation of both employer and employee. There can, of course, be no 'failure' on the part of an employer to provide suitable employment if the employee refuses, and continues to refuse, to enter his employment, or, if the facts show that the employee's conduct is inconsistent with the necessary degree of co-operation on his part. Such would be the case where the employee has undertaken full-time employment with another employer so long as such employment continues, or, where the employee moves his residence to a place so remote from the employer's place of business as to be quite incompatible with employment by that employer. Likewise, it would seem, the position would be the same where after his partially incapacitating injury the worker suffers further injuries or sickness resulting in total incapacity for any form of work. It must be remembered that not only is the obligation to provide suitable employment a continuing one but there must also be a continuing failure to provide suitable employment in order to entitle a worker to continuing benefits pursuant to s.11(2) and, in our view, there cannot be a continuing failure where the circumstances are such that it can be seen that throughout any relevant period the employee is not ready, willing or able to enter the employ of the pre-injury employer."

1. In my opinion, R.J. Brodie's case and the numerous other cases that deal with the subject of mutuality between employer and employee are of limited value in considering the provisions that are contained in s19 of the Act. R.J. Brodie's case was dealing with legislation that imposed an obligation on an employer to provide suitable employment to his injured worker during a period of partial incapacity. As to that obligation, the High Court said that an employer would be relieved of that statutory obligation if the worker was not ready, willing and able to enter the employment. On the other hand, s19 of the Act contains no such obligation as it is not primarily directed to a resumption of the employer-employee relationship. As I have earlier stated, the primary purpose of the section, as contained in subss(2) and (3), is the ascertainment of the injured employee's ability to earn in suitable employment. Ms Rawling's act of resignation could, perhaps, be evidence that she was not, in late 1989, ready or willing to work at Heidelberg (I put to one side the issue of her ability to work at that time) but it did not entitle the decision-maker to say:
   

"Your resignation, for personal reasons of moving to Adelaide, was seen as an act of removing yourself from available employment."

1. That statement showed that the decision-maker had failed to understand that the first task was to assess whether Ms Rawling had any, and if so what, ability to earn money in suitable employment. Because Ms Rawling was totally incapacitated throughout the period October 1989 to March 1990 (and perhaps longer) she had no ability to earn and any offer of employment would have been justifiably refused by her. In other words, at that time, her resignation and her move to Adelaide had nothing to do with her ability to earn. Thereafter, when a medical assessment indicated that Ms Rawling had a limited ability to earn, the evidence disclosed that her employer made no offer of employment and the evidence failed to disclose that there was any other suitable employment for her.

2. In my opinion the Tribunal's decision was correct and this appeal should be dismissed with costs.